INTERIM SERVICES INC, S-3, 1998-04-23

INTERIM SERVICES INC
S-3, 1998-04-23
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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 23, 1998

REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

INTERIM SERVICES INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
DELAWARE 36-3536544
(STATE OF INCORPORATION) (IRS E.I.N.)
</TABLE>

------------------------------

2050 SPECTRUM BOULEVARD
FORT LAUDERDALE, FL 33309, (954) 938-7600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------

JOHN B. SMITH, ESQ.
SENIOR VICE PRESIDENT
2050 SPECTRUM BOULEVARD
FORT LAUDERDALE, FL 33309
(954) 938-7600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------

COPIES TO:

<TABLE>
<S> <C>
ANDREW HULSH, ESQ. EDWIN D. WILLIAMSON, ESQ.
BAKER & MCKENZIE SULLIVAN & CROMWELL
701 BRICKELL AVENUE, SUITE 1600 1701 PENNSYLVANIA AVE., N.W.
MIAMI, FL 33131 WASHINGTON, D.C. 20006
(305) 789-8985 (202) 956-7500
</TABLE>

------------------------------

AS SOON AS POSSIBLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
------------------------------

(Approximate date of commencement of proposed sale to the public)

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _______________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _______________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1)(2) REGISTRATION FEE(2)
<S> <C> <C>
% Convertible Subordinated Notes due , 2005............. $172,500,000 $50,887.50
Common Stock, par value $.01 per share (3)...................... -- None
</TABLE>

(1) Includes $22,500,000 principal amount of Notes subject to the Underwriters'
over-allotment option.

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).

(3) Such indeterminate number of shares as may be initially issuable upon
conversion of the Convertible Subordinated Notes.
------------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 23, 1998

$150,000,000

[LOGO]

% CONVERTIBLE SUBORDINATED NOTES DUE 2005

The Notes are convertible at any time prior to maturity, unless previously
redeemed or repurchased, into shares of Common Stock of Interim Services Inc. at
a conversion rate of shares per each $1,000 principal amount of Notes
(equivalent to a conversion price of approximately $ per share), subject to
adjustment in certain circumstances. On April 21, 1998, the last reported sale
price of the Common Stock, which is listed under the symbol "IS" on the New York
Stock Exchange, was $32 3/16 per share.

Interest on the Notes will be payable on and of each year,
commencing , 1998. The Notes are redeemable, in whole or in part, at the
option of the Company at any time on or after , 2001 at the redemption
prices set forth herein, plus accrued interest to the date of redemption. See
"Description of Notes--Optional Redemption." The Notes are not entitled to a
sinking fund. The Notes will mature on , 2005.

In the event of a Change of Control (as defined herein), each holder of
Notes may require the Company to repurchase its Notes, in whole or in part, for
cash or, at the Company's option, Common Stock (valued at 95% of the average
closing prices for the five trading days ending on and including the third
trading day prior to the repurchase date) at a repurchase price of 100% of the
principal amount of Notes to be repurchased, plus accrued interest to the
repurchase date. See "Description of Notes--Repurchase at Option of Holders Upon
a Change of Control."

The Notes are unsecured obligations subordinated in right of payment to all
existing and future Senior Debt (as defined herein) of the Company and will be
effectively subordinated in right of payment to all indebtedness and other
liabilities of the Company's subsidiaries. As of March 27, 1998, the Company had
$ million of Senior Debt outstanding. After giving effect to the
offering of the Notes and the application of net proceeds therefrom, the
Company, as of March 27, 1998, would have had $ million of Senior Debt
outstanding on such date. The Indenture will not restrict the Company or its
subsidiaries from incurring Senior Debt or other indebtedness.

Concurrently with the Notes Offering, the Company is offering 7 million
shares of its Common Stock by a separate prospectus. The consummation of the
Notes Offering and the Common Stock Offering are not conditioned upon each
other.

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY INVESTORS
IN EVALUATING AN INVESTMENT IN THE NOTES OFFERED HEREBY, SEE "RISK FACTORS"
BEGINNING ON PAGE 10.
---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------

<TABLE>
<CAPTION>
INITIAL PUBLIC
OFFERING PRICE UNDERWRITING PROCEEDS TO
(1) DISCOUNT (2) COMPANY (1)(3)
----------------- ------------- ---------------
<S> <C> <C> <C>
Per Note...................................................... % % %
Total (3)..................................................... $ $ $
</TABLE>

- --------------------------
(1) Plus accrued interest, if any, from 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $ payable by the Company.
(4) The Company has granted the Underwriters an option for 30 days to purchase
up to an additional $22,500,000 aggregate principal amount of Notes at the
initial public offering price shown above, less the underwriting discount,
solely to cover over-allotments. If such option is exercised in full, the
total public offering price, underwriting discount and proceeds to Company
will be $ , $ and $ , respectively. See "Underwriting".
--------------------------

The Notes offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the Notes
will be ready for delivery in book-entry form only through the facilities of DTC
in New York, New York on or about .

GOLDMAN, SACHS & CO. NATIONSBANC MONTGOMERY SECURITIES LLC
<PAGE>
ROBERT W. BAIRD & CO. BT ALEX. BROWN CHASE SECURITIES INC.
INCORPORATED
------------------------

The date of this Prospectus is , 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE CONVERTIBLE NOTES
OR THE COMMON STOCK, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT COVERING
TRANSACTIONS IN SUCH SECURITIES AND THE IMPOSITION OF A PENALTY BID. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE
DETAILED INFORMATION AND THE SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS,
INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE, OR INCORPORATED BY REFERENCE,
IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, THE INFORMATION IN THIS
PROSPECTUS GIVES EFFECT TO THE SALE OF THE COMPANY'S HEALTHCARE DIVISION IN
SEPTEMBER 1997. REFERENCES TO FISCAL 1997, 1996, 1995, 1994 AND 1993 REFER TO
THE COMPANY'S FISCAL YEARS ENDED DECEMBER 26, 1997, DECEMBER 27, 1996, DECEMBER
29, 1995, DECEMBER 30, 1994 AND DECEMBER 24, 1993, RESPECTIVELY. PRO FORMA
FINANCIAL INFORMATION GIVES EFFECT TO ACQUISITIONS AND DISPOSITIONS MADE BY THE
COMPANY IN FISCAL 1997 AS IF THEY OCCURRED AT THE BEGINNING OF FISCAL 1997.

THE COMPANY

GENERAL

Interim Services Inc. ("Interim" or the "Company") is a worldwide leader in
recruiting, assessing and deploying talent for a wide variety of businesses.
Through flexible staffing, recruitment, search, consulting and outplacement
services, the Company provides professionals in the fields of information
technology ("IT"), finance, law, manufacturing and human resources, as well as
clerical, administrative and light industrial staffing.

The Company provides services in two primary groups: (i) the Professional
Services Group, which offers a comprehensive range of consulting, staffing,
outplacement and placement services ("Professional Services") in the areas of
information technology, legal, accounting, banking and finance and human
resources, and (ii) the Commercial Staffing Group, which offers workforce
management and clerical, administrative and light industrial staffing services
("Commercial Staffing Services"). The Professional Services Group and Commercial
Staffing Group each represented approximately 50% of the Company's pro forma
revenues in fiscal 1997. The Company believes that it is one of the five largest
worldwide providers of Professional Services, and one of the ten largest
worldwide providers of Commercial Staffing Services, based on revenue.

Since the Company's initial public offering in January 1994 (the "IPO"), the
Company's network of offices in the Professional Services and Commercial
Staffing Groups has nearly doubled, from 373 offices in North America to 706
offices in 12 countries at the end of fiscal 1997. The Company's revenues from
Professional Services and Commercial Staffing Services increased from $537.0
million in fiscal 1994 to $1.4 billion in fiscal 1997 ($1.5 billion on a pro
forma basis). This growth has been accomplished through strategic acquisitions,
internal growth and capitalizing on cross-selling opportunities. During this
period, the Company acquired 13 companies providing staffing, consulting and
employment services through approximately 146 offices, representing
approximately $492.0 million of acquired revenues, approximately $475.0 million
of which were from Professional Services. In April 1997, the Company acquired
Michael Page Group PLC ("Michael Page"), a premier international recruiting and
staffing company specializing primarily in the accounting, banking and finance
industries. The acquisition of Michael Page, the Company's largest acquisition
to date, has provided the Company with a strong international presence,
substantial growth in its higher-margin Professional Services business, enhanced
cross-selling opportunities and access to a worldwide customer base.

BUSINESS STRATEGY

The Company's goal is to drive revenue and earnings growth by delivering
innovative integrated human resources solutions worldwide through its
consultative approach to workforce management. The Company intends to achieve
this goal through a growth strategy that includes strategic acquisitions, with
particular emphasis in its high-margin Professional Services businesses, opening
new offices in existing and new geographic markets and continued development of
its client base by capitalizing on cross-selling opportunities. This growth
strategy is complimented by an operating strategy of offering a comprehensive
range of innovative services under common brands through decentralized,
entrepreneurial offices providing specialized expertise. Through the
implementation of the Company's strategy, earnings before interest and taxes
("EBIT") as a percentage of revenues increased from 2.6%

3
<PAGE>
in fiscal 1993 (without giving effect to the restatement of the Company's
financial statements to account for the acquisition of Brandon Systems
Corporation ("Brandon") as a pooling-of-interests) to 6.5% in fiscal 1997.

The key elements of the Company's strategy are:

PROVIDE INNOVATIVE PRODUCTS AND SERVICES. By taking a consultative approach
to client needs, the Company has developed innovative, value-added services that
help clients better manage their human assets. Interim On-Premise utilizes
proprietary software that provides "qualitative" measurement of performance,
quantitative analysis of staffing efficiencies and unique reporting. The
Company's "interim.com" website and "Emerging Workforce" surveys contain
employment information that can be used by both candidates and clients, and the
website was made part of the Smithsonian Institution's Permanent Research
Collection on Information Technology Innovation.

UTILIZE ADVANCED RECRUITMENT METHODS. The Company has added new techniques
to successfully recruit and retain candidates. Through five recruitment centers
in Europe, Asia and South Africa, Interim recruits professionals predominantly
to the U.S. to fill a shortage of skills. In addition, Interim was the first
company in the staffing industry to implement national television advertising
featuring a toll-free number (1-800-A-CAREER) and full-page WALL STREET JOURNAL
advertising for managerial and executive positions. Recruitment efforts are
globally supported by both Internet and Intranet-based technology and a
developing central candidate database that will allow the Company to maintain
contact with candidates throughout the duration of their careers.

4
<PAGE>
the basis of brand awareness and local specialized expertise. Each of the
Company's offices are organized on this basis, thereby providing clients with
perceived value and enhanced services by enabling them to deal with Interim
representatives who "speak their language" and understand their specific human
resources requirements. Further, all Interim managers are compensated based on
profits generated within their scope of responsibility and cross-selling
activities, and they are responsible for their own hiring, pricing, business mix
and local promotion.

INDUSTRY OVERVIEW

The global staffing services industry has experienced significant growth in
response to the changing work environment worldwide. According to Eurostat, the
European Commission's statistical body, the total staffing services market in
developed economies had revenues of approximately $94 billion in 1995 (the
latest available data). The focus of the staffing industry is changing from
employers' traditional use of staffing services to manage personnel costs and
meet fluctuating staffing requirements to the reduction of administrative
overhead by outsourcing human resources operations that are not part of their
core business competencies. The use of flexible staffing services has allowed
employers to improve productivity, outsource specialized skills and avoid the
negative effects of layoffs. Rapidly changing regulations concerning employee
benefits, insurance and retirement plans, as well as the high cost of hiring,
laying off and terminating permanent employees has also prompted many employers
to take advantage of the flexibility of temporary and contract staffing
arrangements. In addition to the economic conditions driving staffing industry
growth, the Company believes that changing demographics of the workforces of
developed economies and evolving attitudes concerning work patterns, both
domestically and internationally, also contribute to growth in the staffing
industry. These trends have accelerated with the pace of technological change
and greater global competitive pressures.

The U.S. remains the largest and most important staffing service market in
the world. According to STAFFING INDUSTRY REPORT, U.S. staffing industry
revenue, including temporary help, placement, search and outplacement, grew from
approximately $29.3 billion in 1992 to approximately $65.0 billion in 1997,
representing a compound annual growth rate of 17.3%. The U.K. is the second
largest national staffing services market in the world. According to a report
commissioned by the Federation of Recruitment and Employment Services in the
U.K., staffing industry revenue in the U.K. grew from approximately $8.9 billion
in 1992 to approximately $21.8 billion in 1996, representing a compound annual
growth rate of 25.1%.

The staffing services market in most countries in which the Company operates
is highly fragmented and includes a large number of medium-sized and small
businesses, many of which operate in a single geographic market. This
fragmentation, combined with changing client demands and competitive pressures,
has resulted in a trend towards industry consolidation. This consolidation is
being driven by, among other things, client demands for "one-stop shopping" from
staffing providers. Faced with a desire to minimize the number of vendors,
coupled with the need for sophisticated management information systems, the
growth of national or global relationships and the expansion of professional
level specialties, clients demand the services of large staffing companies
capable of offering a full range of staffing services over a broad geographic
area. This ability has been particularly important in fulfilling the needs of
large regional, national and international accounts. Within this more
competitive environment, smaller companies may have difficulties competing due
to limited service offerings, geographic concentration and lack of sufficient
working capital and management resources. As a result, many smaller companies
have been acquired in recent years and the Company believes that small and
medium-sized staffing companies are becoming increasingly responsive to
acquisition proposals by larger firms, such as the Company. Furthermore, the
Company believes that consolidation may also occur among larger regional and
national companies.

The Company is a Delaware corporation whose corporate headquarters are
located at 2050 Spectrum Boulevard, Fort Lauderdale, Florida 33309. The
Company's telephone number is (954) 938-7600.

5
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
SECURITIES OFFERED $150,000,000 aggregate principal amount of % Convertible
Subordinated Notes due 2005 (the "Notes" and the offering of
such Notes, "The Notes Offering"). The Company has granted
the Underwriters an option for 30 days to purchase up to
$22,500,000 additional aggregate principal amount of Notes,
solely to cover over-allotments.

INTEREST PAYMENT DATES Interest on the Notes is payable at the rate set forth on
the cover page hereof, semi-annually on each and
, commencing , 1998.

CONVERSION RIGHT The Notes are convertible at any time prior to maturity,
unless previously redeemed or repurchased, into shares of
Common Stock at a conversion rate of shares per $1,000
principal amount of Notes (equivalent to a conversion price
of approximately $ per share), subject to adjustment
in certain circumstances as described herein. See
"Description of Notes -- Conversion Rights."

SUBORDINATION The Notes are subordinated in right of payment to all
existing and future Senior Debt (as defined herein) of the
Company and will be effectively subordinated to all
indebtedness and other liabilities of the Company's
subsidiaries. As of March 31, 1998, the Company had
$ million aggregate principal amount of Senior Debt
outstanding, approximately $ million of which will
be repaid with the net proceeds from this offering. The
indenture will not restrict the Company or its subsidiaries
from incurring additional Senior Debt or other indebtedness.
See "Capitalization," "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and
"Description of Notes -- Subordination."

OPTIONAL REDEMPTION The Notes will be redeemable at the Company's option, in
whole or in part, at any time on or after , 2001 at
the redemption prices set forth herein plus accrued interest
to the date of redemption. See "Description of Notes --
Optional Redemption."

REPURCHASE AT OPTION OF In the event of a Change of Control, each holder of Notes
HOLDERS UPON A CHANGE OF may require the Company to repurchase its Notes, in whole or
CONTROL in part, for cash or, at the Company's option, Common Stock
(valued at 95% of the average closing prices for the five
trading days immediately preceding and including the third
trading day prior to the repurchase date) at a repurchase
price of 100% of the principal amount of Notes to be
repurchased, plus accrued interest to the repurchase date.
See "Description of Notes -- Repurchase at Option of Holders
Upon a Change of Control."

USE OF PROCEEDS The Company intends to use the net proceeds to repay
outstanding borrowings under its revolving credit facility.
See "Use of Proceeds."
</TABLE>

6
<PAGE>

<TABLE>
<S> <C>
LISTING The Notes will not be listed on any securities exchange or
quoted on the Nasdaq Stock Market. The Underwriters have
advised the Company that they intend to make a market in the
Notes. The Underwriters are not obligated, however, to make
a market in the Notes, and any such market making may be
discontinued at any time at the sole discretion of the
Underwriters without notice. See "Underwriting."

COMMON STOCK The Common Stock is listed on the New York Stock Exchange
under the symbol "IS."
</TABLE>

RISK FACTORS

See "Risk Factors" for certain considerations relevant to an investment in
the securities offered hereby.

CONCURRENT COMMON STOCK OFFERING

Concurrently with the Notes Offering, the Company is offering 7,000,000
shares of its Common Stock (the "Common Stock Offering") by a separate
prospectus. The consummation of the Notes Offering and the Common Stock Offering
are not conditioned upon each other.

7
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

<TABLE>
<CAPTION>
FISCAL YEAR
PRO FORMA ----------------------------------------------------------
1997(1) 1997 1996 1995 1994 (2) 1993
----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
Revenues:
Commercial Division
Commercial Staffing......................... $ 744,210 $ 739,662 $ 602,396 $ 515,454 $ 431,348 $ 347,189
Professional Services......................... 771,798 675,031 308,687 138,140 99,935 79,691
HealthCare Division (3)....................... -- 186,869 228,669 205,719 165,614 143,209
Other Income.................................. 3,974 6,694 7,399 4,934 7,799 4,171
----------- ---------- ---------- ---------- ---------- ----------
Total Revenues.......................... 1,519,982 1,608,256 1,147,151 864,247 704,696 574,260
Expenses:
Cost of Services.............................. 1,021,855 1,081,113 795,789 600,169 491,404 402,039
----------- ---------- ---------- ---------- ---------- ----------
Gross Profit................................ 498,127 527,143 351,362 264,078 213,292 172,221

Selling, General & Admin...................... 334,431 363,152 243,652 177,105 137,859 119,763
Licensee Commissions.......................... 43,958 45,091 39,500 37,295 33,796 20,586
----------- ---------- ---------- ---------- ---------- ----------
Results of Operations....................... 119,738 118,900 68,210 49,678 41,637 31,872

Amort. of Intangibles......................... 20,628 18,492 8,802 6,884 6,041 5,671
Interest Expense (4)(5)....................... 31,472 24,269 5,696 990 112 1,787
Gain on Sale of HealthCare Business (6)....... -- (5,300) -- -- -- --
Merger Expense (7)............................ -- -- 8,600 -- -- --
----------- ---------- ---------- ---------- ---------- ----------

Earnings Before Taxes....................... 67,638 81,439 45,112 41,804 35,484 24,414

Income Taxes.................................. 31,255 38,928 22,097 18,071 16,028 11,564
----------- ---------- ---------- ---------- ---------- ----------
Net Earnings................................ $ 36,383 $ 42,511 $ 23,015 $ 23,733 $ 19,456 $ 12,850
----------- ---------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ---------- ----------
Net Earnings Per Share (8):
Basic....................................... $ 0.93 $ 1.08 $ 0.71 $ 0.77 $ 0.64 $ 0.47
Diluted..................................... 0.90 1.05 0.69 0.76 0.63 0.47
Earnings Per Share
(excl. merger expenses) (7)(8):
Basic....................................... $ 0.94
Diluted..................................... 0.91
Weighted Average Shares (8):
Basic....................................... 39,305 39,305 32,450 30,804 30,386 27,381
Diluted..................................... 40,407 40,407 33,418 31,324 30,782 27,476
OPERATING INFORMATION:
System-wide Sales(9).......................... $1,743,824 $2,187,409 $1,834,258 $1,494,260 $1,279,339 $1,085,759
----------- ---------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ---------- ----------
Ratio of Earnings to Fixed Charges (12)....... 2.81 3.66 5.59 13.35 17.41 7.30
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 26, 1997
-----------------------------------------
AS AS FURTHER
ACTUAL ADJUSTED(10) ADJUSTED (11)
---------- -------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working Capital.............................. $ 73,210
Total Assets................................. 1,091,734
Long-term Obligations........................ 379,197
% Convertible Subordinated Notes
</TABLE>

- ------------------------

(1) Since the beginning of fiscal 1997, Interim has made certain acquisitions
which were accounted for under the purchase method of accounting, and it
disposed of its HealthCare Division on September 26, 1997. The pro forma
consolidated statement of income and sales data give effect to the
acquisitions and the disposition as though they occurred at the beginning of
fiscal 1997. See Notes to Consolidated Financial Statements.

8
<PAGE>
(2) Fiscal year 1994 contained 53 weeks. All other years contained 52 weeks.

(3) Revenues for the HealthCare Division are included through the date of
disposition of September 26, 1997 and do not include certain allocations of
other income.

(4) Interest expense is net of interest income earned by Brandon prior to the
Company's merger with Brandon on May 23, 1996, which was accounted for as a
pooling-of-interests. See note 7.

(5) Prior to September 25, 1993, the Company's working capital and acquisition
financing were provided by H & R Block ("Block"), which owned 100% of the
Company's issued and outstanding capital stock prior to the IPO. There was
no interest charged on intercompany debt. In conjunction with the IPO,
effective September 25, 1993, Block formalized this arrangement by (i)
providing a revolving credit facility in the amount of $20,000 to fund the
operating requirements of the Company; (ii) converting $30,000 of
intercompany indebtedness on such date to a term loan and (iii) contributing
$51,289 to the capital of the Company. The earnings data for fiscal 1993
give effect to this arrangement as if it occurred at the beginning of the
period. Interest expense has been computed at 6% and income taxes at the
statutory rate.

(6) On September 26, 1997, the Company sold its HealthCare business. Amount
represents pre-tax gain on sale. Taxes on the gain were $5,272. See Notes to
Consolidated Financial Statements page F-10.

(7) Represents fees and expenses related to the merger with Brandon, and the
consolidation and restructuring of the combined companies.

(8) Adjusted to reflect a two-for-one stock split in the form of a 100% stock
dividend paid on September 5, 1997.

(9) System-wide sales is defined as sales of all company-owned, franchised and
licensed offices. Sales data for franchised offices are derived from reports
provided by franchisees, which are not audited. Systemwide sales should not
be considered in isolation or as a substitute for revenues prepared in
accordance with generally accepted accounting principles, or as a measure of
profitability.

(10) Adjusted to reflect the sale by the Company of $150,000,000 aggregate
principal amount of Notes (before deduction of the underwriting discount and
the Company's estimated offering expenses) and the application of the
proceeds therefrom. See "Use of Proceeds."

(11) Further adjusted to reflect the sale by the Company of the 7,000,000 shares
of Common Stock offered hereby at an assumed offering price of $ per
share (before deduction of the underwriting discount and the Company's
estimated offering expenses) and the application of the proceeds therefrom.
See "Use of Proceeds."

(12) The ratio of earnings to fixed charges is calculated by dividing income
from continuing operations before fixed charges and income taxes
("earnings") by fixed charges. Fixed charges consist of interest expense and
that portion of rental expense that the Company believes to be
representative of interest.

9
<PAGE>
RISK FACTORS

IN EVALUATING THE COMPANY'S BUSINESS, PROSPECTIVE INVESTORS SHOULD CAREFULLY
CONSIDER THE FOLLOWING FACTORS IN ADDITION TO THE INFORMATION CONTAINED
ELSEWHERE IN THIS PROSPECTUS OR INCORPORATED BY REFERENCE HEREIN.

COMPETITIVE MARKETS

The staffing services industry is intensely competitive and highly
fragmented, with few barriers to entry by potential competitors at the local
level. The Company faces significant competition in the markets it serves and
will continue to face significant competition in any geographic markets or
industry sectors that it may enter. In each market in which the Company
operates, it competes for both clients and qualified personnel with other firms
offering such consulting staffing services. The majority of competitors are
significantly smaller than the Company. However, certain of the Company's
competitors have greater marketing and financial resources than the Company.
Many clients use more than one staffing services company and it is common for a
major client to use several staffing services companies at the same time. In
recent years, however, there has been a significant increase in the number of
large potential clients consolidating their staffing services purchases with a
single company or with a small number of companies. The trend to consolidate
staffing services purchases has in some cases made it more difficult for the
Company to obtain business from potential clients who have already contracted to
fill their staffing needs with competitors of the Company. In addition,
consulting and accounting firms have begun to offer services in certain of the
Company's markets. The Company also faces the risk that certain of its current
and prospective clients may decide to provide similar services internally or use
independent contractors. There can be no assurance that the Company will not
encounter increased competition in the future, which could have a material
adverse effect on the Company's results of operations or financial condition.
See "Business--Competition".

ABILITY TO GROW AND MANAGE GROWTH

The Company has experienced significant growth in the past which has
resulted from the acquisition of existing businesses, new office openings, new
service offerings, the further development of existing offices, industry trends
towards the increasing use of temporary and contract personnel and favorable
economic conditions. The ability of the Company to continue to grow and to
successfully manage its growth will depend on a number of factors, including the
continuation of such industry trends, the availability of suitable acquisition
candidates on reasonable terms, the effective integration of newly acquired
companies, the ability of the Company to adapt to new geographic and human
resources services markets and the ability to successfully recruit and train
staff. There can be no assurance that the Company will be able to maintain or
effectively manage growth, establish and expand its market presence or continue
to identify suitable acquisition candidates or complete the acquisitions on
terms favorable to the Company. In addition, there can be no assurance that any
acquired businesses will achieve anticipated financial results. Furthermore,
acquisitions involve a number of special risks, including diversion of
management's attention, the potential failure to retain key personnel at an
acquired company, risks associated with unanticipated events or liabilities and
amortization of goodwill or other acquired intangible assets, some or all of
which could have a material adverse effect on the Company's results of
operations or financial condition. See "Business--Business Strategy" and
"--Acquisitions".

FLUCTUATIONS IN LOCAL ECONOMIES

The Company currently operates businesses in 12 countries worldwide. In pro
forma fiscal 1997, approximately 78.5% of revenues and approximately 50.8% of
operating profit were generated in North America, 19.2% of revenues and 44.6% of
operating profit were generated in Europe, and 2.3% of revenues and 4.6% of
operating profit were generated in the Asia Pacific region. Historically, the
general

10
<PAGE>
level of economic activity in a country has significantly affected the demand
for staffing services in that country. An economic downturn in a country or a
region in which the Company operates may adversely affect the demand for the
Company's staffing services in that country or region and could have a material
adverse effect on the Company's results of operations or financial condition.
During such downturns, the use of temporary and contract employees usually is
curtailed, the recruitment of permanent employees is reduced and the Company may
face increased competitive pricing pressures. As economic activity increases,
temporary and contract employees often are added to the workforce before
permanent employees are hired. During periods of increased economic activity and
generally higher levels of employment in a particular country or region, the
competition among staffing firms for qualified personnel in that country or
region becomes even greater. There can be no assurance that during these periods
the Company will be able to recruit the personnel necessary to fill its clients'
needs.

BUSINESS RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS; CURRENCY FLUCTUATIONS

Operations in the Company's markets are subject to risks inherent in
international business activities, including, in particular, varying economic
and political conditions, cultures and business practices in different countries
or regions, overlapping or differing tax structures, compliance with a variety
of accounting and reporting requirements and changing and, in some cases,
complex or ambiguous foreign laws and regulations. Fluctuations in the exchange
rates between the U.S. dollar and the currencies of the other countries in which
the Company operates will affect the results of the Company's international
operations reported in U.S. dollars. See "--Fluctuations in Local Economies".

DEPENDENCE ON AVAILABILITY OF QUALIFIED PERSONNEL

The Company depends upon its ability to attract qualified personnel who
possess the skills and experience necessary to meet the staffing requirements of
its clients. The Company must continually evaluate and upgrade its base of
available qualified personnel to keep pace with changing client needs and
emerging technologies. Competition for individuals with proven professional or
technical skills is intense, and demand for such individuals is expected to
remain very strong for the foreseeable future. In particular, the Company's IT
operations are dependent upon the recruitment of qualified personnel, many of
whom are from outside the U.S. Government regulations currently impose a quota
on the number of foreign persons having this expertise who are permitted to work
in the U.S.

RELIANCE ON KEY PERSONNEL

The Company is highly dependent on its management. The continued success of
the Company will depend in large part on the abilities and continued services of
Raymond Marcy, its Chairman, President and Chief Executive Officer, and certain
other officers and key employees. The loss of Mr. Marcy or other officers and
key employees could have a material adverse effect on the Company's operations.

INFORMATION TECHNOLOGY TRENDS

Growth in the use of flexible staffing in the IT area in recent years has
been driven largely by rapid technological advances. As the sophistication and
complexity of business information systems increase, and as the general
corporate trend toward downsizing continues, businesses are increasingly turning
to specialized, outside technical personnel to support their IT operations. The
Company's success in the IT area depends in large part on its ability to keep
pace with existing technology, predict new technological advancements and
recruit and train based on these trends.

YEAR 2000 ISSUE

The Company believes that it has prepared its computer systems and related
software to accommodate data sensitive information relating to the Year 2000.
The Company expects that any additional costs

11
<PAGE>
related to ensuring such systems and software to be Year 2000-compliant will not
be material to the financial condition or results of operations of the Company.
In addition, the Company is discussing with its vendors and customers the
possibility of any difficulties which may affect the Company as a result of its
vendors and customers ensuring that their computer systems and software are Year
2000-compliant. To date, no significant concerns have been identified. However,
there can be no assurance that no Year 2000 related computer operating problems
or expenses will arise with the Company's computer systems and software or in
the computer systems and software of the Company's vendors and customers. The
Company's IT Consulting Group performs work for clients to assist them in
modifying their computer systems and software to make them Year 2000 compliant.
Generally, this work is performed under the direction and supervision of the
client and without warranties as to results or usability. Accordingly, the
Company does not believe that it will incur any material liabilities to clients
for its work on their Year 2000 projects.

EMPLOYER RISKS

Flexible staffing providers employ and place people in the workplace of
other businesses. Attendant risks of such activity which could increase the
Company's cost of doing business include possible claims of discrimination and
harassment, employment of illegal aliens, errors and omissions by the Company's
flexible staff, particularly for the acts of temporary professionals (e.g.,
accountants and attorneys), misuse or misappropriation of client funds or
proprietary information and other similar claims. While the Company maintains
insurance coverage for general liability, errors and omissions and employee
theft, such insurance coverage may not be adequate in scope or amount to cover
any such liability. A failure of any Company personnel to observe the Company's
policies and guidelines intended to reduce exposure to these risks, relevant
client policies and guidelines, or applicable supranational, national, regional
or local laws, rules or regulations, or other circumstances that cannot be
predicted, could result in negative publicity and the payment by the Company of
monetary damages or fines, or have other material adverse effects upon the
Company. In addition, the Company is exposed to potential claims with respect to
the placement process. Because of legal constraints and considerations in
certain jurisdictions, the Company has found it increasingly difficult to verify
candidates' backgrounds. Although the Company historically has not had any
significant problems arising from the matters discussed above, there can be no
assurance that the Company will not experience such problems in the future.

INCREASED COSTS FROM GOVERNMENT REGULATION

In conducting its business, the Company is required to pay a number of
payroll and related costs and expenses, including unemployment taxes, workers'
compensation and insurance and medical insurance for its personnel. Unemployment
insurance premiums paid by employers typically increase during periods of
increased levels of unemployment. Workers' compensation costs have increased
over the past decade and may increase in the future as states have raised
benefit levels and liberalized allowable claims. Future earnings could be
adversely affected if the Company is not able to increase the fees charged to
its clients to absorb the increased costs related to unemployment insurance or
workers' compensation benefits. The Company's costs could also increase as a
result of regulatory reforms, such as universal mandatory health insurance or
the possible imposition of additional requirements and restrictions relating to
the placement of candidates. It is uncertain whether any such proposals will be
adopted and how any such proposals, if adopted, would affect the Company.
Internationally, regulatory requirements at supranational, national, regional
and local levels vary substantially and frequently change. There can be no
assurance that the Company will be able to adapt to future regulatory changes
made by the regulatory authorities of any jurisdiction in which the Company
conducts its business.

12
<PAGE>
SUBORDINATION

The Notes will be unsecured and subordinated in right of payment in full to
all existing and future Senior Debt of the Company. As a result of such
subordination, in the event of the Company's liquidation or insolvency, payment
default with respect to Senior Debt, a covenant default with respect to Senior
Indebtedness, or upon acceleration of the Notes due to an event of default, the
assets of the Company will be available to pay obligations on the Notes only
after all Senior Debt has been paid in full, and there may not be sufficient
assets remaining to pay amounts due on any or all of the Notes then outstanding.
The Company may from time to time incur indebtedness constituting Senior Debt.
The Notes are also effectively subordinated in right of payment to all
indebtedness and other liabilities, including trade payables, of the Company's
subsidiaries. The Indenture does not prohibit or limit the incurrence of Senior
Debt or other indebtedness and other liabilities by the Company or its
subsidiaries. The incurrence of additional indebtedness and other liabilities by
the Company or its subsidiaries could adversely affect the Company's ability to
pay its obligations on the Notes. In addition, the cash flow and ability of the
Company to service debt, including the Notes, may in the future become dependent
in part upon the earnings from the business conducted by the Company through
subsidiaries and distribution of those earnings, or upon loans or other payments
of funds by those subsidiaries to the Company. As of December 26, 1997, after
giving effect to the offering of the Notes and the application of the net
proceeds thereof, the Company would have had $376.3 million of Senior Debt
outstanding. See "Description of Notes--Subordination."

LIMITATIONS OF REPURCHASE OF NOTES

Upon a Change of Control, each holder of Notes will have the right, at the
holder's option, to require the Company to repurchase all or a portion of such
holder's Notes. If a Change of Control were to occur, there can be no assurance
that the Company would have sufficient funds to pay the repurchase price for all
Notes tendered by the holders thereof. The Company may elect, subject to certain
conditions, to make such payment using shares of Common Stock. In addition, the
Company's repurchase of Notes as a result of the occurrence of a Change of
Control may be prohibited or limited by, or create an event of default under,
the terms of agreements related to borrowings which the Company may enter into
from time to time, including agreements relating to Senior Debt. See
"Description of Notes--Repurchase at Option of Holders Upon a Change of
Control."

ABSENCE OF PUBLIC MARKET FOR THE NOTES

The Notes will be a new issue of securities with no established trading
market. Although the Underwriters have advised the Company that they intend to
make a market in the Notes, they are not obligated to do so, and any such market
making may be discontinued at any time at the sole discretion of any such
Underwriter without notice. There can be no assurance that an active market for
the Notes will develop and continue upon completion of the Notes Offering or
that the market price of the Notes will not decline. Various factors could cause
the market price of the Notes to fluctuate significantly, including changes in
prevailing interest rates or changes in perceptions of the Company's
creditworthiness. The trading price of the Notes also could be significantly
affected by the market price of the Common Stock, which could be subject to wide
fluctuations in response to a variety of factors, including quarterly variations
in operating results and general economic and market conditions. The Notes will
not be listed on any securities exchange or quoted on the New York Stock
Exchange. See "Underwriting."

13
<PAGE>
USE OF PROCEEDS

The net proceeds of the Notes Offering, before giving effect to the
Company's estimated Offering expenses and the underwriting discount, are
expected to be approximately $150 million (approximately $172.5 million if the
Underwriters' over-allotment option is exercised in full). Approximately $186.7
million of the net proceeds of the Notes Offering and the Common Stock Offering,
if consummated, will be used to repay principal and interest under the Company's
U.S. indebtedness under existing credit facilities with the remainder to be used
for general corporate purposes, including future acquisitions. The maturity of
such debt is and the weighted average interest rate is %. Following the
Notes Offering, the Company intends to maintain a certain amount of indebtedness
on its balance sheet which is denominated in pounds sterling and lodged in a
foreign subsidiary for operating purposes. To the extent the Underwriters'
over-allotment option is exercised, net proceeds from such exercise will also be
used for general corporate purposes, including future acquisitions.

CONCURRENT COMMON STOCK OFFERING

Concurrent with the Offering, the Company is offering 7,000,000 shares of
Common Stock by a separate prospectus. The consummation of the Offering and the
Notes Offering are not conditioned upon each other.

14
<PAGE>
PRICE RANGE OF COMMON STOCK

Since August 7, 1996, the Company's Common Stock has been traded on the New
York Stock Exchange under the symbol "IS". Prior thereto, the Common Stock
traded on the Nasdaq National Market under the symbol "INTM". The following
table sets forth for the periods indicated the high and low closing prices of
the Common Stock as reported by the Nasdaq National Market and the New York
Stock Exchange.

<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
FISCAL 1996
First Quarter............................................ $ 20.375 $ 17.125
Second Quarter........................................... 25.125 17.375
Third Quarter............................................ 22.000 18.250
Fourth Quarter........................................... 22.813 17.000

FISCAL 1997
First Quarter............................................ 21.563 17.125
Second Quarter........................................... 21.438 17.563
Third Quarter............................................ 25.625 21.750
Fourth Quarter........................................... 31.000 23.625

FISCAL 1998
First Quarter............................................ 33.750 23.250
Second Quarter (through April 21, 1998).................. 34.188 31.875
--------- ---------
</TABLE>

The closing price of the Common Stock on April 21, 1998, was $32.188

DIVIDEND POLICY

No cash dividend or other cash distribution with respect to the Company's
Common Stock has ever been paid by the Company. The Company currently intends to
retain any earnings for use in its business and does not anticipate paying any
cash dividends in the foreseeable future.

15
<PAGE>
CAPITALIZATION

The following table sets forth the cash and capitalization of the Company as
of December 26, 1997 and (i) as adjusted to reflect the sale of $150,000,000
principal amount of Notes and (ii) as further adjusted to reflect the sale of
7,000,000 shares of Common Stock by the Company at an assumed offering price of
$ per share (the last reported sales price of the Common Stock on the
New York Stock Exchange) and the application of the gross proceeds therefrom, in
each case before giving effect to the Company's estimated offering expenses and
the underwriting discount. See "Use of Proceeds"; "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Financing" and
"Concurrent Common Stock Offering". The table should be read in conjunction with
the selected consolidated financial and operating data, the consolidated
financial statements and the related notes thereto included elsewhere in this
Prospectus.
<TABLE>
<CAPTION>
DECEMBER 26, 1997
-----------------------------------
<S> <C> <C> <C>
AS AS FURTHER
ACTUAL ADJUSTED ADJUSTED
--------- ----------- -----------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
Cash, cash equivalents.................................... $ 15,570 $ $
--------- ----------- -----------
--------- ----------- -----------
Current portion of long-term debt......................... $ 33,827 $ $
Long-term debt............................................ 379,197
--------- ----------- -----------
Total debt............................................ $ 413,024 $ $
Stockholders' equity:
Preferred stock, par value $.01 per share; 2,500,000
shares authorized; none issued or outstanding......... --
Common stock, par value $.01 per share; 100,000,000
shares authorized; 39,745,761 shares issued and
outstanding (actual); 46,745,761 (as
adjusted)(1)(2)....................................... 397
Additional paid-in capital.............................. 260,067
Retained earnings....................................... 206,461
Cumulative Translation Adjustment....................... 6,667
--------- ----------- -----------
Total stockholders' equity............................ $ 473,592 $ $
--------- ----------- -----------
Total capitalization, including short-term debt....... $ 886,616 $ $
--------- ----------- -----------
--------- ----------- -----------
</TABLE>

- ------------------------

(1) An additional and 4,909,869 shares of Common Stock are reserved for
issuance upon the conversion of the Notes and the exercise of stock options
that have been or may be granted under the Company's stock option plans,
respectively.

(2) The number of authorized shares of common stock gives effect to the approval
of the proposal to be voted on by the Company's stockholders on May 7, 1998
to amend the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock to 100,000,000 shares.

16
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The selected consolidated financial statement data for each of the three
years in the period ended fiscal 1997 and as of the end of fiscal 1997 and
fiscal 1996 are derived from, and are qualified by reference to, the Company's
audited consolidated financial statements and related notes thereto which,
together with the related report of Deloitte & Touche LLP, independent auditors,
are included elsewhere in this Prospectus. The selected consolidated financial
statement data for each of fiscal 1994 and fiscal 1993 and as of the end of
fiscal 1995, fiscal 1994 and fiscal 1993 are derived from audited consolidated
financial statements of Interim and Brandon not included herein, and have been
restated consistent with pooling-of-interests treatment. The following
information should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements and notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
FISCAL YEAR
PRO FORMA -------------------------------------------------------
1997(1) 1997 1996 1995 1994 (2) 1993
----------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
Revenues:
Commercial Division
Commercial Staffing.............................. $ 744,210 $ 739,662 $ 602,396 $ 515,454 $ 431,348 $ 347,189
Professional Services............................ 771,798 675,031 308,687 138,140 99,935 79,691
HealthCare Division(3)............................. -- 186,869 228,669 205,719 165,614 143,209
Other Income....................................... 3,974 6,694 7,399 4,934 7,799 4,171
----------- ---------- ---------- --------- --------- ---------
Total Revenues................................. 1,519,982 1,608,256 1,147,151 864,247 704,696 574,260
Expenses:
Cost of Services................................... 1,021,855 1,081,113 795,789 600,169 491,404 402,039
----------- ---------- ---------- --------- --------- ---------
Gross Profit..................................... 498,127 527,143 351,362 264,078 213,292 172,221
Selling, General & Admin........................... 334,431 363,152 243,652 177,105 137,859 119,763
Licensee Commissions............................... 43,958 45,091 39,500 37,295 33,796 20,586
----------- ---------- ---------- --------- --------- ---------
Results of Operations............................ 119,738 118,900 68,210 49,678 41,637 31,872
Amort. Of Intangibles.............................. 20,628 18,492 8,802 6,884 6,041 5,671
Interest Expense (4)(5)............................ 31,472 24,269 5,696 990 112 1,787
Gain on Sale of HealthCare Business (6)............ -- (5,300) -- -- -- --
Merger Expense (7)................................. -- -- 8,600 -- -- --
----------- ---------- ---------- --------- --------- ---------
Earnings Before Taxes............................ 67,638 81,439 45,112 41,804 35,484 24,414
Income Taxes....................................... 31,255 38,928 22,097 18,071 16,028 11,564
----------- ---------- ---------- --------- --------- ---------
Net Earnings..................................... $ 36,383 $ 42,511 $ 23,015 $ 23,733 $ 19,456 $ 12,850
----------- ---------- ---------- --------- --------- ---------
----------- ---------- ---------- --------- --------- ---------
Net Earnings Per Share (8):
Basic............................................ $ 0.93 $ 1.08 $ 0.71 $ 0.77 $ 0.64 $ 0.47
Diluted.......................................... 0.90 1.05 0.69 0.76 0.63 0.47
Earnings Per Share:
(excl. merger expenses)(7)(8):
Basic............................................ $ 0.94
Diluted.......................................... 0.91
Weighted Average Shares (8):
Basic............................................ 39,305 39,305 32,450 30,804 30,386 27,381
Diluted.......................................... 40,407 40,407 33,418 31,324 30,782 27,476
</TABLE>

17
<PAGE>

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
BALANCE SHEET DATA:
Working Capital................................... $ 73,210 $ 169,283 $ 67,526 $ 81,997 $ 78,898
Total Assets(9)................................... 1,091,734 512,490 424,489 275,364 242,925
Long-term Obligations............................. 379,197 -- 60,000 -- 30,000

OPERATING INFORMATION:
System-wide Sales(10)............................. $2,187,409 $1,834,258 $1,494,260 $1,279,339 $1,085,759
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>

- ------------------------

(1) Since the beginning of fiscal 1997, Interim has made certain acquisitions
which were accounted for under the purchase method of accounting, and it
disposed of its HealthCare Division on September 26,1997. The pro forma
consolidated statement of income and sales data give effect to the
acquisitions and the disposition as though they occurred at the beginning of
fiscal 1997. See Notes to Consolidated Financial Statements.

(2) Fiscal year 1994 contained 53 weeks. All other years contained 52 weeks.

(3) Revenues for the HealthCare Division are included through the date of
disposition of September 26, 1997 and do not include certain allocations of
other income.

(4) Interest expense is net of interest income earned by Brandon prior to the
Company's merger with Brandon on May 23, 1996, which was accounted for as
pooling-of-interests. See note 7.

(5) Prior to September 25, 1993, the Company's working capital and acquisition
financing were provided by Block. There was no interest charged on
intercompany debt. In conjunction with the IPO, effective September 25,
1993, Block formalized this arrangement by (i) providing a revolving credit
facility in the amount of $20,000 to fund the operating requirements of the
Company; (ii) converting $30,000 of intercompany indebtedness on such date
to a term loan and (iii) contributing $51,289 to the capital of the Company.
The earnings data for fiscal 1993 give effect to this arrangement as if it
occurred at the beginning of the period. Interest expense has been computed
at 6% and income taxes at the statutory rate.

(6) On September 26, 1997, the Company sold its HealthCare business. Amount
represents pre-tax gain on sale. Taxes on the gain were $5,272. See Notes to
Consolidated Financial Statements page F-10.

(7) Represents fees and expenses related to the merger with Brandon, and the
consolidation and restructuring of the combined companies.

(8) Adjusted to reflect a two-for-one stock split in the form of a 100% stock
dividend paid on September 5, 1997.

(9) Certain reclassifications have been made to prior periods to conform to
current year presentation.

(10) System-wide sales is defined as sales of all company-owned, franchised and
licensed offices. Sales data for franchised offices are derived from reports
provided by franchisees, which are not audited. Systemwide sales should not
be considered in isolation or as a substitute for revenues prepared in
accordance with generally accepted accounting principles, or as a measure of
profitability.

18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
"SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA" AND NOTES THERETO INCLUDED
ELSEWHERE IN THIS PROSPECTUS AND THE CONSOLIDATED FINANCIAL STATEMENTS AND
RELATED NOTES INCLUDED ELSEWHERE IN THIS PROSPECTUS.

INTRODUCTION

The Company is a worldwide leader in recruiting, assessing and deploying
talent for a wide variety of businesses. Through flexible staffing, recruitment,
search, consulting and outplacement services, the Company provides professionals
in the fields of information technology, finance, law, manufacturing and human
resources, as well as clerical, administrative and light industrial staffing.

The Company provides services in two primary groups: (i) the Professional
Services Group, which offers a comprehensive range of consulting, staffing,
outplacement and placement services in the areas of information technology,
legal, accounting, banking and finance and human resources, and (ii) the
Commercial Staffing Group, which offers workforce management and clerical,
administrative and light industrial staffing services. The Professional Services
Group and the Commercial Staffing Group each represented approximately 50% of
the Company's pro forma revenues in fiscal 1997. The Company believes that it is
one of the five largest worldwide providers of Professional Services, and one of
the ten largest worldwide providers of Commercial Staffing Services, based on
revenue.

RESULTS OF OPERATIONS

The following table sets forth operational results as a percentage of total
revenues for the periods indicated:

<TABLE>
<CAPTION>
PRO FORMA
1997 1997 1996 1995
------------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenue:
Professional Services.................................. 50.8% 42.0% 26.9% 16.0%
Commercial Staffing.................................... 49.2 46.2 52.9 60.0
HealthCare Division.................................... -- 11.8 20.2 24.0
----- --------- --------- ---------
Total Revenues..................................... 100.0% 100.0% 100.0% 100.0%
Cost of Services......................................... 67.2 67.2 69.4 69.4
----- --------- --------- ---------
Gross Profit............................................. 32.8 32.8% 30.6% 30.6%
Selling, General & Administrative........................ 22.0 22.6 21.2 20.5
Licensee Commissions..................................... 2.9 2.8 3.4 4.3
----- --------- --------- ---------
Results from Operations.................................. 7.9% 7.4% 6.0% 5.8%
Merger Expense........................................... -- -- 0.8 --
Gain on Sale of HealthCare Business...................... -- (0.3) -- --
Amortization of Intangibles.............................. 1.4 1.2 0.8 0.8
Interest................................................. 2.1 1.5 0.5 0.1
Taxes.................................................... 2.0 2.4 1.9 2.1
----- --------- --------- ---------
Net Earnings............................................. 2.4% 2.6% 2.0% 2.8%
----- --------- --------- ---------
----- --------- --------- ---------
Net Earnings (excluding merger expenses)................. 2.4% 2.6% 2.7% 2.8%
----- --------- --------- ---------
----- --------- --------- ---------
</TABLE>

19
<PAGE>
FISCAL 1997 COMPARED TO 1996

REVENUES. Revenues in 1997 increased 40.2% to $1,608.3 million from
$1,147.2 million in the prior year. Professional Services revenues increased
118.7% reflecting strong internal growth and the Michael Page and AIM
acquisitions. Excluding these acquisitions, Professional Services revenues
increased 31.0%. Commercial Staffing revenues increased 22.8% reflecting the
expansion of the Interim On-Premise program, an increase in the number of
offices and increased business in existing offices. HealthCare Division revenues
decreased due to the sale of the HealthCare business at the end of the third
quarter of 1997.

GROSS PROFIT. Gross profit increased 50.0% to $527.1 million from $351.4
million in the prior year. Gross profit margin was 32.8% compared with 30.6% in
fiscal 1996. This increase was principally due to the acquisition of the
higher-margin business of Michael Page, partially offset by the elimination of
higher gross profit generated by the HealthCare business which was sold at the
end of the third quarter of 1997.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 49.0% to $363.2 million from $243.7 million in
the prior year period. Selling, general and administrative expenses as a
percentage of revenues were 22.6% compared to 21.2% a year ago due to the higher
costs associated with Professional Services. These higher gross margin
businesses have higher operating expenses than the Company's Commercial Staffing
business.

LICENSEE COMMISSIONS. Licensee commissions increased 14.2% to $45.1 million
from $39.5 million in the prior year period and is consistent with the growth in
licensee revenues. Licensee commissions as a percentage of total revenues
decreased from 3.4% to 2.8% due to licensee revenue becoming a smaller portion
of overall revenue.

AMORTIZATION OF INTANGIBLES. Amortization expense increased 110.1% to $18.5
million from $8.8 million in the prior year period reflecting the increase in
intangible assets arising from acquisitions, primarily Michael Page.

INTEREST EXPENSE. Interest expense increased 326.1% to $24.3 million from
$5.7 million in 1996. This resulted from increased borrowings for acquisitions,
primarily Michael Page. The Company had average borrowings outstanding during
1997 of $361.2 million and accrued an average interest rate of 6.9%. See
"--Liquidity and Capital Resources--Financing".

TAXES ON EARNINGS. The effective tax rate for 1997 was 47.8% compared with
49.0% last year. The 1997 effective rate includes an approximate 100% effective
rate on the $5.3 million HealthCare sale gain due to a lower tax basis than book
basis in this business. Last year's high rate resulted from a large portion of
the 1996 merger expense being nondeductible. The effective tax rates excluding
these two unusual items were 44.2% and 43.0% for the years ended December 26,
1997 and December 27, 1996, respectively. The increase in the effective rate,
excluding unusual items, resulted from higher levels of non-deductible goodwill
in 1997.

NET EARNINGS. Net earnings excluding merger expenses increased 39.1% to
$42.5 million ($1.05 diluted per share) from $30.6 million ($0.91 diluted per
share) in the prior year period. This represents a 15.4% increase in per share
earnings. Including merger expenses, net earnings increased 84.7% to $42.5
million ($1.05 diluted per share) from $23.0 million ($0.69 diluted per share)
in the prior year period. The weighted average number of shares used in the per
share calculation (as adjusted for the dilutive impact of common stock
equivalents) increased to 40,407,000 from 33,418,000 in the prior year period,
primarily due to the additional shares issued as a result of the public offering
on October 17, 1996.

20
<PAGE>
FISCAL 1996 COMPARED TO 1995

REVENUES. Revenues in 1996 increased 32.7% to $1,147.2 million from $864.2
million in the prior year. Professional Services revenues increased 123.5%
reflecting significant IT acquisitions and internal growth. Commercial Staffing
revenues increased 16.9% reflecting the expansion of the Interim On-Premise
program and an increase in the number of offices and services provided.
HealthCare division revenues increased 11.3% due to increases in the number of
offices and expansion of occupational health and physicians services.

GROSS PROFIT. Gross profit increased 33.1% to $351.4 million from $264.1
million in the prior year period. Gross profit margin was 30.6%, the same as
1995. Although the Company added revenues of higher gross profit business
through acquisitions and increases in the Professional Services, this was offset
by a decline in franchise royalties as a percent of total Company revenue and an
increase in the percentage of Commercial Staffing, which generally have lower
gross profit margins.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 37.6% to $243.7 million from $177.1 million in
the prior year period. Selling, general and administrative expenses as a
percentage of revenues were 21.2% compared with 20.5% in 1995 due to the higher
relative costs associated with Professional Services.

LICENSEE COMMISSIONS. Licensee commissions increased 5.9% to $39.5 million
from $37.3 million in the prior year period and consistent with the growth in
licensee revenues. Licensee commissions as a percentage of revenues decreased
from 4.3% to 3.4% due to the Company purchasing several license operations, one
licensee converting to a franchise and slower general growth of licensee
revenues compared with branch revenue growth.

AMORTIZATION OF INTANGIBLES. Amortization expense increased 27.9% to $8.8
million from $6.9 million in the prior year period reflecting the increase in
intangible assets arising from acquisitions.

INTEREST EXPENSE. Interest expense increased to $5.7 million from $1.0
million in the prior year; average borrowings during the year were $102.2
million and the Company accrued an average effective interest rate of 6.2%
compared to average borrowings of $22.3 million and an average effective
interest rate of 6.6% in 1995.

TAXES ON EARNINGS. The effective tax rate of 49.0% in 1996 resulted from a
large portion of merger expenses, recorded in the first half of 1996, being
nondeductible. The effective tax rate, excluding the effects of nonrecurring
merger expenses, was 43.0% compared with 43.2% in the prior year. The decline in
the effective tax rate is due primarily to higher earnings in proportion to the
level of nondeductible intangibles.

NET EARNINGS. Net earnings excluding merger expenses increased 28.8% to
$30.6 million ($0.91 diluted per share) from $23.7 million ($0.76 diluted per
share) in the prior year period. This represents a 19.7% increase in per share
earnings. Including merger expenses, net earnings decreased 3.0% to $23.0
million, or $0.69 diluted per share from $23.7 million ($0.76 diluted per share)
in the prior year period. The weighted average number of shares used in the per
share calculation (as adjusted for the dilutive impact of common stock
equivalents) increased to 33,418,000 from 31,324,000 in the prior year period,
primarily due to the additional shares issued as a result of the secondary
public offering on October 17, 1996.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW

Historically, the Company has financed its operations through cash generated
by operating activities and bank lines of credit. The Company's principal uses
of cash are funding acquisitions, capital

21
<PAGE>
expenditures, working capital needs and repayment of debt. The nature of the
Company's business requires payment of wages to its flexible staff on a weekly,
or bi-weekly basis, while payments from clients are generally received 30-60
days after billing.

Cash provided by operating activities in 1997 was $57.8 million compared
with cash used by operations in 1996 of $6.1 million and cash provided by
operations in 1995 of $6.6 million. Higher operating cash flow in 1997 resulted
from increased earnings, amortization and depreciation combined with an increase
in accounts payable and accrued liabilities. Reduced cash flow from operating
activities in both 1996 and 1995 resulted from lower levels of earnings,
depreciation and amortization. Operating cash flow in 1996 was also impacted by
higher receivable levels due to increases in days sales outstanding and $7.6
million (after-tax) of merger expenses paid.

Investing activities used $474.7 million in 1997 primarily due to the
acquisition of Michael Page partially offset by the proceeds from the sale of
the HealthCare business. The Company obtained funds from borrowing under a
multi-currency credit facility for the acquisition of Michael Page. See further
discussion in Financing below. Proceeds from the sale of the HealthCare
business, net of transaction costs, and operating cash flow were used to reduce
these borrowings, leaving $413.0 million of debt outstanding at December 26,
1997. Investing activities in 1996 and 1995 included $12.0 million and $99.0
million, respectively, of other acquisitions, the most significant of which was
the acquisition of the Computer Power Group for $71 million in 1995.

Investing activities in 1997 included $24.9 million of capital expenditures
compared with $33.0 million in 1996 and $11.3 million in 1995. Capital
expenditures in 1997 were for new computer hardware and software, new office
furniture and fixtures and the completion of the Company's corporate
headquarters. Capital expenditures in 1996 were for the expansion of the
Company's headquarters and to upgrade and expand the area of information
technology. The Company anticipates continued expenditures to develop and
upgrade many of its information technology systems. Management expects
expenditures in 1998 to approximate 1997 levels.

On October 17, 1996, the Company completed a public offering of 8.5 million
shares (7.9 million shares sold by the Company) of common stock at $21.63 per
share. Net proceeds to the Company were approximately $163.1 million, of which
$131.7 million was used to repay borrowings under the Company's credit
facilities.

The Company intends to continue to make strategic acquisitions to grow its
business. Funding for these acquisitions will come from: (i) internally
generated funds; (ii) borrowings on the Company's credit facility and (iii)
raising additional capital.

FINANCING

The Company has available a $535.9 million multi-currency credit agreement
entered into as of May 1, 1997 and amended as of June 2, 1997. Outstanding
borrowings at December 26, 1997 under this agreement were a $176.7 million term
loan, a $219.5 million revolving loan and $16.8 million in loan notes to prior
shareholders of Michael Page. The term loan is denominated in U.S. dollars while
the revolving loans are denominated in U.S. dollars and British pound sterling.
Borrowings under this facility are unsecured. The credit facility is available
to fund the Company's acquisitions, to supply working capital and to provide for
general corporate needs. Interest rates on amounts outstanding under the Credit
Facility are based on LIBOR plus a variable margin. The facility contains
customary covenants, which include the maintenance of certain financial ratios
including minimum net worth, restrictions on the incurrence of liens and
additional indebtedness. In addition, the Company has established short-term,
unsecured, uncommitted lines of credit with certain banks. These lines of credit
are based on LIBOR and are available to fund the Company's short-term capital
requirements. No amounts were outstanding under these agreements at December 26,
1997.

22
<PAGE>
There was approximately $120.0 million available for future borrowings under
these agreements at December 26, 1997.

IMPACT OF THE YEAR 2000 ISSUE

The year 2000 issue is the result of computer applications being written
using two digits rather than four to define the applicable year. Any of the
Company's computer programs that have date-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices or engage in similar normal business activities.

Based on a recent assessment, the Company determined that it will be
required to upgrade certain application systems to ensure operability after the
year 1999. However, the Company's most significant internally developed systems
will require modest remediation to be fully ready for year 2000. As such, most
of the systems activity that must take place entails upgrading purchased
application systems. The Company believes that these upgrades will take place in
the ordinary course of business without significant incremental cost. Experts
from the Interim Technology Consulting Group's year 2000 practice will be
utilized to augment internal activities in the assessment and testing phases of
the project.

The Company plans to complete its year 2000 upgrade in a timely manner. The
Company does not foresee substantial incremental costs as most of the
applications that are not currently year 2000 ready are purchased third party
software packages. The vendors of those products have announced year 2000
upgrade versions scheduled to be available in the first half of 1998. The costs
of these upgrades are included as part of the ongoing maintenance fees. In
addition, the Company is discussing with its vendors and customers the
possibility of any difficulties which may affect the Company as a result of its
vendors and customers ensuring that their computer systems and software are year
2000-compliant. To date, no significant concerns have been identified. However,
there can be no assurance that no year 2000 related computer operating problems
or expenses will arise with the Company's computer systems and software or in
the computer systems and software of the Company's vendors and customers. The
Company's IT Consulting Group performs work for clients to assist them in
modifying their computer systems and software to make them year 2000 compliant.
Generally, this work is performed under the direction and supervision of the
client and without warranties as to results or usability. Accordingly, the
Company does not believe that it will incur any material liabilities to clients
for its work on their year 2000 projects.

INFLATION

The effects of inflation on the Company's operations were not significant
during the periods presented in the financial statements.

FOREIGN OPERATIONS

With the acquisition of Michael Page, the Company has significantly expanded
its business outside of North America. The results of operations of Michael Page
are included within the Professional Services Group. The Company also has
Commercial Staffing operations in The Netherlands. In 1997, revenue and
operating earnings (before interest and taxes, and gain on sale of HealthCare
business) from foreign operations were $251.2 million and $39.5 million,
respectively. There are currently no legal restrictions regarding the
repatriation of cash flows from these foreign operations.

SEASONALITY AND CYCLICALITY OF BUSINESS

The Company's businesses are not seasonal in nature, but the staffing
business has historically been considered to be cyclical, often acting as a
coincidental indicator of both economic downswings

23
<PAGE>
and upswings. However, the balance between Professional Services and Commercial
Staffing Services should help reduce the impact of cyclicality. The acquisition
in 1997 and growth of AIM which specializes
in outplacement should also mitigate the impact of cyclicality as outplacement
growth rates amplify during a slower economy, offsetting other services which
may be more sensitive to economic declines. As a result of general shifting of
employment patterns and the growth in Interim On-Premise, the Company believes
it may become less cyclical. Finally, the Company's presence in 12 countries may
reduce cyclicality based on management's belief that the economies of every
country will not suffer economic downturns simultaneously. No single customer
accounts for more than 2% of the Company's sales.

OTHER

In June 1997, Statement of Financial Accounting Standards ("SFAS") No. 130,
"Reporting Comprehensive Income," was issued. SFAS No. 130 establishes standards
for reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. SFAS No. 130 requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence as
other financial statements. SFAS No. 130 is effective for fiscal years beginning
after December 15, 1997. Reclassification of financial statements for earlier
periods provided for comparative purposes is required. The Company will adopt
this standard in 1998.

In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information", was issued. SFAS No. 131 establishes standards for the way
that public companies report selected information about operating segments in
annual financial statements and requires that those companies report selected
information about segments in interim financial reports issued to shareholders.
SFAS No. 131 also establishes standards for related disclosures about products
and services, geographic areas, and major customers and supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise". SFAS No. 131 is
effective for financial statements for periods beginning after December 15,
1997. The Company has historically reported its information under one segment.
This standard will require the Company to report financial information
consistent with how the business is managed. The Company will adopt this
standard in 1998.

24
<PAGE>
BUSINESS

COMPANY OVERVIEW

The Company provides services in two primary groups: (i) the Professional
Services Group, which offers a comprehensive range of consulting, staffing,
outplacement and placement services in the areas of information technology,
legal, accounting, banking and finance and human resources, and (ii) the
Commercial Staffing Group, which offers workforce management and clerical,
administrative and light industrial staffing services. Professional Services and
Commercial Staffing Services each represented approximately 50% of the Company's
pro forma revenues at the end of fiscal 1997. The Company believes that it is
one of the five largest worldwide providers of Professional Services, and one of
the ten largest worldwide providers of Commercial Staffing Services, based on
fiscal 1997 revenues.

Since the IPO, the Company's network of offices in its Professional Services
and Commercial Staffing groups has nearly doubled, from 373 offices in North
America to 706 offices in 12 countries at the end of fiscal 1997. The Company's
revenues from Professional Services and Commercial Staffing Services increased
from $537.0 million in fiscal 1994 to $1.4 billion in fiscal 1997 ($1.5 billion
on a pro forma basis). This growth has been accomplished through strategic
acquisitions, internal growth and by capitalizing on cross-selling
opportunities. During this period, the Company acquired 13 companies providing
staffing, consulting and employment services through approximately 146 offices,
representing approximately $492 million of acquired revenues, approximately
$475.0 million of which were from Professional Services. In April 1997, the
Company acquired Michael Page, a premier international recruiting and staffing
company specializing primarily in accounting, banking and finance, currently
with 51 offices located throughout Europe and the Asia Pacific region. The
acquisition of Michael Page, the Company's largest acquisition to date, has
provided the Company with a strong international presence, substantial growth in
its higher-margin Professional Services business, enhanced cross-selling
opportunities and access to a worldwide customer base.

INDUSTRY OVERVIEW

The global staffing services industry has experienced significant growth in
response to the changing work environment worldwide. According to Eurostat, the
European Commission's statistical body, the total staffing services market in
developed economies had revenues of approximately $94 billion in 1995 (the
latest available data). The focus of the staffing industry is changing from
employers' traditional use of staffing services to manage personnel costs and
meet fluctuating staffing requirements to the reduction of administrative
overhead by outsourcing human resources operations that are not part of their
core business competencies. The use of flexible staffing services has allowed
employers to improve productivity, to outsource specialized skills and to avoid
the negative effects of layoffs. Rapidly changing regulations concerning
employee benefits, insurance and retirement plans, as well as the high cost of
hiring, laying off and terminating permanent employees has also prompted many
employers to take advantage of the flexibility offered through temporary and
contract staffing arrangements. In addition to the economic conditions driving
staffing industry growth, the Company believes that changing demographics of the
workforces of developed economies and evolving attitudes concerning work
patterns also contribute to growth in the staffing industry. These trends have
accelerated with the pace of technological change and greater global competitive
pressures.

The U.S. remains the largest and most important staffing service market in
the world. According to STAFFING INDUSTRY REPORT, U.S. staffing industry
revenue, including temporary help, placement, search and outplacement, grew from
approximately $29.3 billion in 1992 to approximately $65.0 billion in 1997,
representing a compound annual growth rate of 17.3%. The National Association of
Temporary and Staffing Services has estimated that more than 90% of all U.S.
businesses utilize staffing services. Also, the U.S. Bureau of Labor Statistics
has stated that penetration of the U.S. work force by temporary and contract
workers has increased from approximately 0.4% in 1992 to approximately 1.9% in
1996. One of

25
<PAGE>
the fastest growing sectors for the staffing services industry, as well as for
the Company, is information technology. According to the STAFFING INDUSTRY
REPORT, 1996 revenue for this sector in the U.S. is estimated to have been $11.7
billion, a 27.2% increase over 1995, and is estimated to have grown to $14.9
billion in 1997, representing a compound annual growth rate of 23.9% since 1992.
In addition, revenues for other professional level staffing, including
accounting, finance and legal, were estimated to have grown from $1.8 billion in
1992 to $6.1 billion in 1997, representing a compound annual growth rate of
27.6%. The Company believes that Professional Services requires longer-term,
more highly-skilled personnel services and, therefore, offers the opportunity
for higher profitability than the Commercial Staffing Services because of the
value-added nature of professional and technical staffing personnel.

The U.K. is the second largest national staffing services market in the
world. According to a report commissioned by the Federation of Recruitment and
Employment Services in the U.K., staffing industry revenue in the U.K. grew from
approximately $8.9 billion in 1992 to approximately $21.8 billion in 1996,
representing a compound annual growth rate of 25.1%. According to Eurostat, the
U.K. had the highest penetration rate of temporary and contract workers in the
world in 1995 (the latest available data), at approximately 3.3%. Demographic
indicators produced by the U.K. Institute for Employment Studies predict a
return to labor shortages in the U.K., particularly in technical and skilled
sectors. This shortage is expected to result from a shrinking labor pool coupled
with continued demand for specialized skills. While a shrinking labor pool may
reduce the number of suitable candidates for the Company to place with its
clients, it may also increase the demand for the Company's specialized
recruiting skills. The Company believes that these factors, as well as the
continued relatively rapid growth in the service sector, should increase the
opportunities to place workers in the U.K.

The total staffing services market in the European Union (excluding the
U.K.) during 1995 (the latest available data) was estimated by Eurostat to be
approximately $24.0 billion, with France, Germany, The Netherlands and Belgium
accounting for over 90% of such market. The continental European staffing
services industry is currently characterized by discrete domestic markets that
have no significant cross-border contact. Between 1992 and 1995 (the latest
available data), the staffing services industry grew at compound annual rates of
11.8% in France, 12.9% in Germany, 13.4% in The Netherlands and 11.4% in
Belgium. In many other European countries, the staffing services industry has
only recently begun to develop. The European Commission has noted trends towards
deregulation and greater labor market flexibility which the Company believes
will increase the use of temporary and contract labor throughout Europe. For
example, Spain, Sweden and Italy have recently enacted legislation that
eliminated or modified laws which had previously significantly restricted or
prohibited the operations of private staffing services companies. In the
emerging markets of Eastern Europe, the Company believes that demand for
staffing services is increasing as a result of deregulation of certain local
labor laws and increasing economic development.

In certain countries in the Asia Pacific region, particularly Australia, the
staffing service industry is well developed, and the Company believes that
opportunities exist for expansion in both Professional Services and Commercial
Staffing Services.

The staffing services market in most countries in which the Company operates
is highly fragmented and includes a large number of small businesses, many of
which operate in a single geographic market. This fragmentation, combined with
changing client demands and competitive pressures, has resulted in a trend
towards industry consolidation. This consolidation is being driven by, among
other things, client demands for "one-stop shopping" from staffing providers.
Faced with a desire to minimize the number of vendors, coupled with the need for
sophisticated management information systems, the growth of national or global
relationships and the expansion of professional level specialties, clients have
begun to demand the services of large staffing companies capable of offering a
full range of staffing services over a broad geographic area. This ability has
been particularly important in fulfilling the needs of large regional, national
and international accounts. Within this more competitive environment, smaller
companies may have difficulties competing due to limited service offerings,
geographic concentration and lack of sufficient working capital and management
resources. As a result, many smaller companies have been acquired in recent
years and the Company believes that small and mid-sized staffing companies are
becoming increasingly responsive to acquisition proposals by larger firms, such
as the Company.

26
<PAGE>
Furthermore, the Company believes that consolidation may also occur among larger
regional and national companies.

BUSINESS STRATEGY

The Company's goal is to drive revenue and earnings growth by delivering
innovative integrated human resources solutions worldwide through its
consultative approach to workforce management. The Company intends to achieve
this goal through a growth strategy that includes strategic acquisitions, with
particular emphasis in its higher-margin Professional Services businesses,
opening new offices in existing and new geographic markets and continued
development of its client base by capitalizing on cross-selling opportunities.
This growth strategy is complemented by an operating strategy of offering a
comprehensive range of innovative services under common brands through
decentralized, entrepreneurial offices providing specialized expertise. Through
the implementation of the Company's strategy, EBIT as a percentage of revenues
increased from 2.6% in fiscal 1993 (without giving effect to the restatement of
the Company's financial statements to account for the acquisition of Brandon as
a pooling-of-interests) to 6.5% in fiscal 1997.

The key elements of the Company's strategy are:

CONTINUE TO EXPAND THROUGH ACQUISITIONS. The Company believes that there is
an opportunity to acquire additional companies consistent with its business
strategy because of the highly fragmented nature of the staffing industry and
the pressures of increased competition. The Company intends to continue to make
complementary acquisitions that can be integrated into existing operations, as
well as strategic acquisitions that provide entry into new geographic markets or
service lines. This acquisition strategy focuses on strong, well managed
staffing and consulting companies domestically and internationally. The Company
has a proven track record of successfully acquiring companies, integrating them
within the Company's existing operations and producing growth rates of acquired
companies in excess of their historical performance. Since the IPO, the Company
has added approximately 161 offices and over $550 million in revenues through
acquisition.

MAINTAIN STRONG ORGANIC GROWTH. A significant portion of the Company's
growth has resulted from internal expansion, which includes new office openings
and development of existing offices. The Company intends to continue to add
offices by expanding into new geographic markets, both domestically and
internationally, and to open new offices in existing markets to increase the
range of services offered in such markets. New office openings are jointly
planned by corporate and local management based upon various criteria, including
market demand, availability of quality candidates and whether a new office would
complement or broaden the Company's current geographic network or service
offerings. The Company also believes that it has been able to accelerate the
growth of existing offices by capitalizing on cross-selling opportunities. To
this end, the Company's integration managers focus on facilitating cross-selling
opportunities on a regional basis. The Company opened 187 offices from the date
of the IPO through the end of fiscal 1997.

PROVIDE A COMPREHENSIVE RANGE OF SERVICES. The Company believes that
significant demand exists from current and prospective clients to procure a
substantial portion of their human resources solutions from a single company,
thereby enabling them to assess and deploy personnel more efficiently and
productively. Accordingly, the Company seeks to be regarded by its clients as
their human resources partner and is committed to developing a broad range of
innovative, value-added human resource solutions to meet their evolving needs on
a worldwide basis. Since the IPO, the Company has significantly increased the
range of services offered, moving from solely providing flexible staffing
services to offering a full range of Commercial and Professional Services. The
higher-margin Professional Services include workforce management, recruitment,
consulting and outplacement services in the fields of information technology,
law, accounting, banking and finance. The Company believes that Professional
Services may be less cyclical and provide attractive cross-selling opportunities
for other Interim offices.

27
<PAGE>
of performance, quantitative analysis of staffing efficiencies and unique
reporting. The Company's "interim.com" website and "Emerging Workforce" surveys
contain employment information that can be used by both candidates and clients,
and the website was made part of the Smithsonian Institution's Permanent
Research Collection on Information Technology Innovation. In addition, the
Company conducted a nationwide survey with Louis Harris and Associates to
identify emerging workforce trends to assist clients in human resource planning.

UTILIZE ADVANCED RECRUITMENT METHODS. The Company has added new techniques
to successfully recruit and retain candidates. Through five recruitment centers
in Europe, Asia and South Africa, Interim recruits professionals, predominantly
to the U.S., to fill a shortage of skills. In addition, Interim was the first
company in the staffing industry to implement national television advertising
featuring a toll-free number (1-800-A-CAREER) and full-page WALL STREET JOURNAL
advertising for managerial and executive positions. Recruitment efforts are
globally supported by both Internet and Intranet-based technology and a
developing central candidate database that will allow the Company to maintain
contact with candidates throughout the duration of their careers. Once a
candidate is employed, the Company focuses on training to maintain or enhance
skills and offers certain employees full-time salaries, benefits and
participation in the Company's employee benefit plans as a form of retention.

LEVERAGE BRAND IDENTITY. Interim is one of a small number of staffing
companies which provides Commercial Staffing Services and Professional Services
under the same brand name, thereby maximizing cross-selling opportunities (e.g.,
Interim Technology, Interim Accounting Professionals, Interim Legal Services,
Interim Attorneys, Interim Personnel, etc.). Through this common branding, the
Company and its franchisees and licensees are better able to benefit from
national media advertising. The Company also benefits from brand name
recognition of certain of its subsidiaries including Michael Page, a premier
recruitment organization focusing on the placement of finance professionals
internationally, has established strong name recognition within the world's
largest financial markets and The Stratford Group, the Company's executive
search business specializing in the recruitment of high-level executives,
benefits from name recognition among senior management.

DELIVER SERVICES THROUGH SPECIALIZED OFFICES SUPPORTED BY DECENTRALIZED
STRUCTURE. The Company's businesses are operated to be responsive to local
business practices and market conditions. The Company believes that its existing
and potential clients choose service providers largely on the basis of brand
awareness and local specialized expertise. Each of the Company's offices are
organized on this basis, thereby providing clients with perceived value and
enhanced services by enabling them to deal with Interim representatives who
"speak their language" and understand their specialized human resources
requirements. Further, all Interim managers are compensated based on profits
generated within their scope of responsibility and cross-selling activities, and
they are responsible for their own hiring, pricing, business mix and local
promotion. The Company believes that this (i) allows the Company to capitalize
on its managers' knowledge of local business conditions and markets, (ii) makes
the Company more attractive to acquisition candidates, (iii) allows for a smooth
transition of acquired businesses and (iv) enables local operating company
managers to develop long-term relationships with key decision makers at both
existing and potential clients.

ACQUISITIONS

The Company's corporate management team has extensive experience in
identifying acquisition candidates and integrating acquired operating companies
into the Company's international network. The Company believes its
decentralized, entrepreneurial management structure facilitates its efforts to
acquire branded staffing companies seeking alliances with an
internationally-focused provider of a broad range of staffing services.

During 1997, the Company acquired two companies which have considerably
furthered the Company's objective to grow the Professional Services Group:
Michael Page, a premier international recruiting and staffing company
specializing in accounting, banking and finance, currently with 51 offices
located in the U.K., France, The Netherlands, Italy, Germany, Australia, Hong
Kong, Singapore, Spain, New Zealand and the U.S., and AIM, a leading provider of
outplacement and career consulting services in the U.S. Since the IPO, the
Company has acquired 18 companies providing staffing, consulting and

28
<PAGE>
employment services through approximately 161 offices, representing
approximately $551.0 million in acquired revenues. In addition to external
acquisitions, Interim usually purchases franchise and license operations which
are for sale. The Company is generally the purchaser of choice when an Interim
franchisee or licensee decides to sell its business. The Company has a first
right of refusal on any franchise sale at the same terms and conditions as may
be agreed with another purchaser and has a standard purchase option on licenses.
Overall, Company-owned branches yield higher profits than franchised or licensed
offices, and the Company therefore believes that the purchase of these offices
is accretive to overall earnings. The Company regularly evaluates potential
acquisitions of companies that can be integrated into existing operations and
strategic acquisitions that provide entry into new geographic markets or service
lines. Certain information related to external acquisitions is summarized in the
following table.

<TABLE>
<CAPTION>
NUMBER REVENUES
ACQUISITION OF IN
ACQUIRED COMPANY DATE OFFICES(1) MILLIONS(2) PRIMARY SERVICES
- -------------------------- ----------- ----------- ------------- --------------------------
<S> <C> <C> <C> <C>
PROFESSIONAL SERVICES
Smyth, Fuchs & Company.... 3/98 5 $ 2.5 Outplacement
Network Companies, Inc.... 2/98 2 5.0 Accounting Staffing &
Placement
de Recat & Associates, 1/98 3 3.5 Outplacement
Inc.....................
A.J. Burton Group, Inc.... 1/98 3 14.6 Accounting Staffing &
Placement
Feldt Personnel 10/97 1 0.5 Accounting Staffing &
Consultants............. Placement
Mainstream Access......... 4/97 16 5.7 Outplacement
Michael Page Group PLC.... 4/97 40 220.0 Accounting & Finance
Staffing & Placement
AIM....................... 3/97 17 35.2 Outplacement, Staffing &
Placement
Brandon Systems........... 5/96 32 89.0 IT Staffing
Of-Counsel................ 5/96 1 1.0 Attorney, Paralegal &
Legal Secretary Staffing
Computer Power Group...... 12/95 17 81.0 IT Consulting and Staffing
Hernand Partners.......... 11/95 3 2.7 Attorney Staffing
Juntunen.................. 10/95 2 13.6 Placement, HR Consulting
and Staffing
OCS Services Group........ 6/95 5 16.1 IT Consulting and Staffing
Career Associates/Career 6/95 5 5.6 Accounting Staffing and
Temps................... Placement
COMMERCIAL STAFFING
Crone Corkhill Limited.... 3/98 2 38.4 High level Administrative
Staffing
Allround/Interplan........ 11/96 6 15.0 Traditional Staffing
ICS Temporary Services.... 12/94 1 1.6 Traditional Staffing
----------- -------------
Total............. 161 $ 551.0
----------- -------------
----------- -------------
</TABLE>

- ------------------------

(1) Office count at time of acquisition.

(2) Revenues shown for 1995 and 1994 acquisitions reflect annualized results for
the year. 1998, 1997 and 1996 acquisitions reflect revenues for the 12
months prior to acquisition.

29
<PAGE>
DESCRIPTION OF OPERATIONS

The Company provides its decentralized field operations with centralized
national and international support in training, information technology,
recruitment, marketing and sales. This includes national television advertising
aimed at building brand identity and recruiting candidates, centralized
candidate databases and expansive internet and intranet communication abilities.
In addition, back office support includes: centralized payroll, billing,
receivables management, risk management, legal services and cash management.
Corporate staff, as well as integration managers in key markets, are dedicated
to supporting cross-selling activities and national/international account
management and expansion. Business units that pass revenue-generating leads to
other business units are rewarded with a corporate-paid fee. This approach
facilitates an environment of high communication among offices, unifies
strategic initiatives and capitalizes upon multinational resources.

The Company provides skills in two primary groups: the Professional Services
Group and the Commercial Staffing Services Group. Each group offers a
comprehensive range of skills to fulfill client requirements and are described
below.

THE PROFESSIONAL SERVICES GROUP

The Professional Services Group offers a comprehensive range of consulting,
staffing, outplacement and placement services in the areas of IT, legal,
accounting, banking and finance and human resources. The Company's total
revenues in fiscal 1997 from Professional Services were $675.0 million,
representing an increase of approximately $366.3 million or 118.7% from fiscal
1996.

ACCOUNTING AND FINANCE. Through the acquisition of Michael Page and the
growth of Interim Accounting Professionals, the Company provides accounting,
banking and finance staffing and placement services worldwide. Michael Page
specializes in recruiting and staffing in areas such as mergers and
acquisitions, corporate finance and funds management. Michael Page operates in
major financial centers across the globe, including London, Paris, Frankfurt,
Amsterdam, Hong Kong, Singapore and Sydney and in 1997, opened its first office
in New York. As a result of the Michael Page acquisition, Interim is the second
largest provider of recruiting and staffing services in the accounting, banking
and financial areas worldwide. In addition, Michael Page provides Interim with a
global presence to grow its On-Premise and traditional staffing businesses.
Interim Accounting Professionals provides accounting and finance personnel at
all levels including bookkeepers, degreed accountants, certified public
accountants, auditors and controllers. Clients include corporate accounting
departments, small businesses and accounting firms of every size. Interim
Accounting Professionals offers temporary and project staffing, temp-to-hire and
full-time placement capabilities.

INFORMATION TECHNOLOGY. Interim has built a leading information technology
consulting and staffing services group operating through 50 offices, of which 47
are in the U.S., two are in the U.K. and one is in Asia, as well as recruiting
centers in South Africa, Asia and The Netherlands. This business provides a
comprehensive scope of IT services including management consulting, staffing and
outsourcing services. Interim Technology services are subdivided into two
specialty offerings, Technology Consulting and Technology Staffing.

Technology Consulting specializes in the areas of software design,
maintenance, development, quality assurance, implementation and strategic IT
consulting. The Technology Consulting Group has separate practices to supply
specialized expertise in the areas of client/server development, legacy systems
support, network integration, software quality management, systems engineering
and technical communications, and provides IT services to Fortune 100 companies.
In addition, the Technology Consulting Group provides management, staffing, and
testing of year 2000 projects. Technology Consulting engagements are generally
longer term and are provided by highly trained full-time employees.

30
<PAGE>
Technology Staffing provides operations-based staffing and support for IT
operations including help desk and data center operations, operations analysis,
communications, operations and PC support. The Technology Staffing Group also
offers a distinctive partnering service whereby its clients maintain complete
strategic control of their information systems and data, but are relieved of
technology staffing and performance issues and thus benefit from the traditional
savings of outsourcing. This type of outsourcing service is typically provided
to clients under a contractual arrangement. The Technology Staffing group
generally provides large numbers of personnel for shorter assignments.

LEGAL SERVICES. The Company's legal staffing offices provide attorneys,
paralegals, court reporters, litigation support and legal transcription services
predominantly to law firms and corporations. In addition, the Company operates a
"Depolab" at its corporate headquarters providing summarization, proofing,
editing and transcription services utilizing proprietary software that permits
law firms to have depositions summarized into 13 different formats. The
centralized Depolab concept enhances supervision, confidentiality and quality
control while making better use of human resources which would otherwise be
located in various local offices.

In 1997 the Company introduced Juris Partners, a product designed to be
similar to Interim On-Premise. Juris Partners is a comprehensive management
program designed to increase the effectiveness and cost-efficiency of a
company's legal support. Through Juris Partners, an on-site Interim manager
evaluates and manages a company's entire legal support function, supplying the
necessary staff and services including project staffing, litigation support,
document management and court reporting.

HUMAN RESOURCE SOLUTIONS. Interim HR Solutions offices provide skilled
professionals such as contract recruiters and human resource professionals for
project assignments and human resource consulting and project management at
client locations or on an outsourced basis. In addition, this group's expertise
ranges from organizational development and training to compensation, plan design
and benefits analysis.

RECRUITMENT. Interim provides nationwide searches for all levels of
employees, up to president and CEO. Retained searches are conducted for
executives and high-level managers, and contingency recruitment is available for
management and professional positions. Businesses rely on Interim to recruit
industry experts who will provide strategic direction and top management skills.
The search group has developed a blue chip client list, and has particular
expertise in the technology industry, working with virtually all of the leading
technology companies in the nation. Relationships are established with companies
at the highest levels when recruiting for executives and management. These
relationships serve as an excellent point of entry for a whole host of
additional Interim services including information technology, legal, accounting,
HR, clerical and light industrial.

CAREER CONSULTING. With nationwide capabilities, Interim manages projects
ranging from large-scale national restructurings to individual cases and is
ranked among the top five outplacement firms in the U.S. Interim provides career
management and outplacement services to help companies and their employees
address career transition and termination issues. Career Consulting services
provide career assessment and management, executive coaching, leadership
development and team alignment.

THE COMMERCIAL STAFFING GROUP

The Commercial Staffing Group offers services ranging from workforce
management to clerical, administrative and light industrial staffing.
Approximately 50% of the Company's total revenues at the end of fiscal 1997 were
derived from the Commercial Staffing Group.

INTERIM PERSONNEL. The traditional flexible staffing business consists of
providing a wide variety of clerical, administrative, assembly and light
industrial skills. In addition to supplying personnel to perform general office
tasks such as reception, copying and filing, the Company provides personnel who
are

31
<PAGE>
proficient in word processing, graphics, spreadsheets or database management. In
the light industrial area, Interim supplies personnel to perform light
industrial tasks such as electronic and precision assembly, PC board assembly,
packaging, shipping and receiving, warehousing, landscaping, construction and
equipment operation. The Company also offers full-time placement of these
skills.

INTERIM ON-PREMISE. In 1992, the Company introduced a new staffing concept,
Interim On-Premise, whereby a client delegates management of its staffing needs
to the Company, allowing the client to focus on its core business activities.
On-Premise has evolved to include managing a client's entire workforce, a
significant portion of which may be permanent staff. To better serve its
On-Premise clients, the Company has developed proprietary software that is
designed to facilitate managing the productivity of personnel at the client's
work site. On-Premise offices are predominantly Company-owned. Since the concept
was introduced, revenues from On-Premise clients have grown to 30% of the
Commercial Staffing Group's revenue for fiscal 1997.

The Company has found that Interim On-Premise clients, who had typically
utilized Commercial Staffing Services, are very receptive to other Interim
services, particularly in the Professional Services area. On-Premise managers
are well positioned to enhance established relationships with key people at
client organizations and, as a result, introduce Professional Services.
Conversely, Professional Services' employees often can identify instances where
clients need additional staffing services and introduce Interim On-Premise.
These clients have also sought to expand the Interim On-Premise service into
their international operations. Management believes the Company's geographic and
service breadth provide a strong competitive advantage in securing such
broad-reaching assignments. Additionally, once in place, clients are reluctant
to terminate their on-premise arrangements, having become dependent on Interim's
knowledge, productivity and proprietary software.

32
<PAGE>
OFFICE STRUCTURE

Interim offices are Company-owned, franchised and licensed. Most offices
serve multiple clients in their respective geographic area, with the exception
of Interim On-Premise sites, which are established at the client's location to
serve only that client. The Company believes that it can better leverage
profitability through its branch locations. The Company originated as a
franchise organization. Currently 70% of revenues are derived from Company owned
operations and the Company does not intend to add additional franchises. The
following table details the number of offices which are Company-owned,
franchised and licensed as of the end of the periods listed.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-------------------------------------
<S> <C> <C> <C>
DECEMBER
-------------------------------------

<CAPTION>
NUMBER OF OFFICES 1997 1996 1995
- ----------------------------------------------------------------------- ----- ----- -----
<S> <C> <C> <C>
BRANCH OFFICES
Commercial Staffing.................................................... 218 191 159
Professional Services.................................................. 181 92 79
HealthCare Services.................................................... -- 113 104
--- --- ---
Total Branch Offices............................................. 399 396 342
--- --- ---
FRANCHISED OFFICES
Commercial Staffing.................................................... 136 131 123
Professional Services.................................................. 3 3 2
HealthCare Services.................................................... -- 285 289
--- --- ---
Total Franchised Offices......................................... 139 419 414
--- --- ---
LICENSED OFFICES
Commercial Staffing.................................................... 150 160 163
Professional Services.................................................. 18 16 11
HealthCare Services.................................................... -- 7 10
--- --- ---
Total Licensed Offices........................................... 168 183 184
--- --- ---
TOTAL OFFICES
Commercial Staffing.................................................... 504 482 445
Professional Services.................................................. 202 111 92
HealthCare Services(1)................................................. -- 405 403
--- --- ---
TOTAL OFFICES.................................................... 706 998 940
--- --- ---
Less HealthCare Services............................................... -- 405 403
--- --- ---
TOTAL EXCLUDING HEALTHCARE....................................... 706 593 537
--- --- ---
--- --- ---
</TABLE>

- ------------------------

(1) The Company sold its HealthCare Services division in September 1997.

COMPANY-OWNED OFFICES

As of December 26, 1997, the Company operated 399 branch offices. Branch
office expansion is generally pursued in markets where Interim has an
established presence and is used to increase market penetration. Additional
expansion is achieved by establishing On-Premise operations at client sites. The
Company intends to continue to expand Company-owned branches in those locations
where it can "cluster" multiple offices in close geographic proximity to utilize
centralized regional and area management and other administrative functions,
which leverages growth and increases profitability.

33
<PAGE>
LICENSED OFFICES

The Company grants licenses, which give the licensee the right to establish
a business utilizing the Company's trade names, service marks, advertising
materials, sales programs, operating procedures, manuals and forms within a
designated territory. As of December 26, 1997, the Company's 71 licensees
operated 168 licensed offices.

Licensees are required to observe the Company's operating procedures and
standards and act as a representative of the Company in recruiting, screening,
classifying, employing and placing flexible staff in response to client orders.
The licensee is responsible for establishing the office and paying related
administrative and operating expenses, such as rent, utilities and salaries of
full-time employees. The Company is responsible for paying the wages of the
flexible staff and all related payroll taxes and insurance. As a result, the
Company provides a substantial portion of the working capital needed for the
licensed businesses.

Sales by the licensed offices are included in the Company's revenues, and
the direct costs of services are included in the Company's cost of services. The
licensee receives a commission from the Company, which generally is equivalent
to 75% of the licensed offices' gross profits. The licensee is required to
participate in the Company's national advertising program and use the Company's
billing, payroll and other data processing services for which a separate fee is
paid to the Company.

FRANCHISED OFFICES

The Company has been granting franchises for approximately 40 years. The
average tenure of commercial franchise ownership exceeds 17 years, and a number
of franchisees are second generation owners. Most franchisees operate more than
one franchise. As of December 26, 1997, the Company's 19 franchisees operated
139 offices. The Company does not intend to add any franchisees.

The Company grants franchisees the right to market and furnish commercial
staffing services within a designated geographic area using the Company's trade
names, service marks, advertising materials, sales programs, operating
procedures, manuals and forms. The Company provides franchises with its
national, regional and local advertising. Franchisees operate their businesses
autonomously within the framework of the Company's policies and standards and
recruit, employ and pay their own full-time and flexible staff. The Company
receives royalty fees from each franchise based upon its sales, and in return
supplies a variety of support and marketing services.

COMPETITION

The Company's largest competitors are Manpower, Inc., Adecco S.A.
(Switzerland), Kelly Services, Inc., The Olsten Corporation, Norrell
Corporation, Robert Half International and AccuStaff, Inc. The Company believes
that it is one of the ten largest worldwide providers of Commercial Staffing
services and one of the five largest worldwide providers of Professional
Services, based upon revenue.

The Company believes that the primary competitive factors in obtaining and
retaining clients are the breadth of services provided as clients seek out
providers that can service all of their staffing needs.

34
<PAGE>
Additionally, other critical competitive factors include the number and location
of offices, an understanding of clients' specific job requirements, the ability
to provide personnel in a timely manner and the ability to monitor the quality
of job performance. The primary competitive factors in obtaining qualified
candidates for employment assignments are quality of available opportunities,
wages, responsiveness to work schedules and number of hours of work available.
The Company believes it has a competitive advantage over its competitors because
it offers a wide range of services and broad availability of skills to its
customers worldwide.

EMPLOYEES

Interim employed more than 400,000 people in 1997, including the Company's
HealthCare division which was sold in September 1997. The Company estimates that
it assigned approximately 350,000 flexible personnel with its clients in 1997,
of whom approximately 70,000 were assigned, on average, at any given time. The
Company assigned approximately 25,000 people in permanent jobs. In addition, the
Company employs approximately 4,000 staff employees full-time in its national
and international operations.

35
<PAGE>
MANAGEMENT

The following table sets forth the names, ages and position with the Company
of its executive officers and key operating management employees.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------------- --- --------------------------------------------------------
<S> <C> <C>
Raymond Marcy............... 47 Chairman, President and Chief Executive Officer

Robert E. Livonius.......... 49 Executive Vice President and Chief Operating Officer

Roy G. Krause............... 51 Executive Vice President and Chief Financial Officer

John B. Smith............... 58 Senior Vice President, Legal Counsel and Secretary

Robert Evans................ 54 Vice President and Chief Information Officer

Ken Kilburn................. 44 Vice President and Chief Administrative Officer

Terry Benson................ 45 Chief Executive Officer -Michael Page Group

Stuart N. Emanuel........... 54 President -- Interim Technology Consulting Group

Robert Miano................ 48 President -- Interim Technology Staffing Group

Gary Peck................... 45 President -- Commercial Staffing Group
</TABLE>

RAYMOND MARCY has served as the Company's Chairman since August, 1997, as
the Company's Chief Executive Officer since September 1991 and as the President
and a director since November 1989, as well as the Chief Operating Officer from
November 1989 until September 1991. Prior to joining the Company, Mr. Marcy
served as Senior Vice President of Operations for Adia Services, Inc. ("Adia"),
from 1980 through 1988. While retaining his position as Senior Vice President of
Operations for Adia, from May 1988 until November 1989, Mr. Marcy was President
and Chief Executive Officer of Nursefinders, Inc., the temporary nursing
subsidiary of Adia.

ROBERT E. LIVONIUS has served as the Company's Executive Vice President and
Chief Operating Officer since February 1997, as Executive Vice
President--Operations since August 1993, and as Vice President--HealthCare
Division from August 1991 to August 1993. Prior to joining the Company, Mr.
Livonius served as Vice President--Field Operations for a division of NYNEX
Corporation from June 1986 through June 1991.

ROY G. KRAUSE has served as the Company's Executive Vice President and Chief
Financial Officer since October 1995. Prior to joining the Company, Mr. Krause
served as Executive Vice President of HomeBank Federal Savings Bank and HomeBank
Mortgage Corporation from November 1980 to September 1995.

JOHN B. SMITH has served as the Company's Senior Vice President since
January 1980 and as Legal Counsel and Secretary since January 1965. Mr. Smith
also served as a director from January 1969 until May 1995.

ROBERT EVANS has served as the Company's Vice President and Chief
Information Officer since May 1996. Prior to joining the Company, Mr. Evans held
several executive positions with AT&T, including Vice President--Customer Care
Strategy and Reengineering, Chief Technology Officer, Chief Information Officer
and General Manager of the Consumer Interactive Services business unit.

KEN KILBURN has served as the Company's Vice President of Business
Integration and Chief Administrative Officer since January, 1998. Before joining
Interim in January 1989, Mr. Kilburn was Director of PC Options Manufacturing
for Compaq Computer Corp. For nearly 15 years prior thereto,

36
<PAGE>
Mr. Kilburn held various executive management positions in purchasing and
manufacturing operations with Digital Equipment Corp.

TERRY BENSON has served as the Chief Executive Officer of Michael Page since
1989, and held various other positions with Michael Page for nearly ten years
prior thereto.

STUART N. EMANUEL has served as the Company's President--Interim Technology
Consulting Group since May 1997. Prior to joining the Company, Mr. Emanuel held
various executive positions with the Computer Power Group, which was acquired by
the Company in December 1995, including Executive Vice President, Regional Vice
President and Director of Sales.

ROBERT MIANO has served as the Company's President -- Interim Technology
Staffing Group since December 1997. From May 1996 until November 1997, Mr. Miano
served as Executive Vice President -- Interim Technology Staffing Group. From
1992 until May 1996, Mr. Miano served as Vice President -- Operations.

GARY PECK has served as the the Company's President -- Commercial Staffing
Group since August 1997, as Vice President-Commercial Branch Operations from
January 1995 to August 1997 and as Vice President -- Special Services from
August 1991 to December 1994. Prior to joining the Company, Mr. Peck served as
Senior Vice President for Talent Tree Services, Inc., from August 1998 to August
1991.

37
<PAGE>
DESCRIPTION OF NOTES

THE NOTES WILL BE ISSUED UNDER AN INDENTURE, TO BE DATED AS OF ,
1998 (THE "INDENTURE"), BETWEEN THE COMPANY AND , AS TRUSTEE (THE
"TRUSTEE"), A COPY OF WHICH IS FILED AS AN EXHIBIT TO THE REGISTRATION
STATEMENT. WHEREVER PARTICULAR DEFINED TERMS OF THE INDENTURE (INCLUDING THE
NOTES) ARE REFERRED TO, SUCH DEFINED TERMS ARE INCORPORATED HEREIN BY REFERENCE
(THE NOTES BEING REFERRED TO IN THE INDENTURE AS "SECURITIES"). THE FOLLOWING
SUMMARIES OF CERTAIN PROVISIONS OF THE INDENTURE DO NOT PURPORT TO BE COMPLETE
AND ARE SUBJECT TO, AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO, THE
DETAILED PROVISIONS OF THE NOTES AND THE INDENTURE, INCLUDING THE DEFINITIONS
THEREIN OF CERTAIN TERMS.

GENERAL

The Notes will be general unsecured subordinated obligations of the Company,
will be limited to $172,500,000 aggregate principal amount and will mature on
, 2005. Payment in full of the principal amount of the Notes will be
due on , 2005 at a price of 100% of the principal amount thereof.

The Notes will bear interest at the rate per annum set forth on the front
cover of this Prospectus from , 1998 or from the most recent
Interest Payment Date to which interest has been paid or provided for, payable
semi-annually on and of each year, commencing
, 1998 until the principal thereof is paid or made available for
payment, to the Person in whose name the Note (or any Predecessor Note) is
registered at the close of business on the preceding or
, as the case may be. Interest on the Notes at such rate will be
computed on the basis of a 360-day year, comprised of twelve 30-day months.

The Notes will be convertible into shares of Common Stock initially at the
conversion rate stated on the front cover of this Prospectus, subject to
adjustment upon the occurrence of certain events described under "--Conversion
Rights," at any time prior to the close of business on , 2005,
unless previously redeemed or repurchased.

The Notes are redeemable at the option of the Company, at any time on or
after , 2001, in whole or in part, at the redemption prices set
forth below under "--Optional Redemption," plus accrued interest to the
redemption date. The Notes also are subject to repurchase by the Company at the
option of the Holders, as described below under "--Repurchase at Option of
Holders Upon a Change of Control."

The principal of, premium, if any, and interest on the Notes will be
payable, and the Notes may be surrendered for registration of transfer, exchange
and conversion, at the office or agency of the Trustee in The Borough of
Manhattan, The City of New York. In addition, payment of interest may, at the
option of the Company, be made by check mailed to the address of the Person
entitled thereto as it appears in the Security Register. See "--Payment and
Conversion." Payments, transfers, exchanges and conversions relating to
beneficial interests in Notes issued in book-entry form will be subject to the
procedures applicable to Global Notes described below.

The Company initially will appoint the Trustee at its Corporate Trust Office
as paying agent, transfer agent, registrar and conversion agent for the Notes.
In such capacities, the Trustee will be responsible for, among other things, (i)
maintaining a record of the aggregate holdings of Notes represented by the
Global Note (as defined below) and accepting Notes for exchange and registration
of transfer, (ii) ensuring that payments of principal, premium, if any, and
interest received by the Company from the Trustee in respect of the Notes are
duly paid to DTC or its nominees, (iii) transmitting to the Company any notices
from Holders of the Notes, (iv) accepting conversion notices and related
documents and transmitting the relevant items to the Company and (v) delivering
certificates for Common Stock issued upon conversion of the Notes.

38
<PAGE>
The Company will cause each transfer agent to act as a registrar and will
cause to be kept at the office of such transfer agent a register in which,
subject to such reasonable regulations as it may prescribe, the Company will
provide for registration of transfers of the Notes. The Company may vary or
terminate the appointment of any paying agent, transfer agent or conversion
agent, or appoint additional or other such agents or approve any change in the
office through which any such agent acts, provided that there shall at all times
be maintained by the Company, a paying agent, a transfer agent and a conversion
agent in the Borough of Manhattan, The City of New York. The Company will cause
notice of any resignation, termination or appointment of the Trustee or any
paying agent, transfer agent or conversion agent, and of any change in the
office through which any such agent will act, to be provided to Holders of the
Notes.

No service charge will be made for any registration of transfer or exchange
of Notes, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

FORM, DENOMINATION, TRANSFER, EXCHANGE AND BOOK-ENTRY PROCEDURES

Notes will be issued only in fully registered form, without interest
coupons, in minimum denominations of $1,000 and integral multiples in excess
thereof. Notes sold in the Offering will be issued only against payment therefor
in immediately available funds.

The Notes initially will be represented by one or more Notes in registered,
global form without interest coupons (collectively, the "Global Notes" or
"Global Note"). The Global Notes will be deposited upon issuance with the
Trustee as custodian for DTC, in New York, New York, and registered in the name
of DTC or its nominee, in each case for credit to an account of a direct or
indirect participant in DTC as described below.

Transfers of beneficial interests in the Global Notes will be subject to the
applicable rules and procedures of DTC and its direct or indirect participants,
which may change from time to time.

Except as set forth below, the Global Notes may be transferred, in whole and
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for Notes
in certificated form except in the limited circumstances described below under
"--Exchanges of Book-Entry Notes for Certificated Notes."

EXCHANGES OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES. A beneficial interest
in a Global Note may not be exchanged for a Note in certificated form unless (i)
DTC (x) notifies the Company that it is unwilling or unable to continue as
Depositary for the Global Note or (y) has ceased to be a clearing agency
registered under the Exchange Act and in either case the Company thereupon fails
to appoint a successor Depositary, (ii) the Company, at its option, notifies the
Trustee in writing that it elects to cause the issuance of the Notes in
certificated form or (iii) there shall have occurred and be continuing an Event
of Default or any event which after notice or lapse of time or both would be an
Event of Default with respect to the Notes. In all cases, certificated Notes
delivered in exchange for any Global Note or beneficial interests therein will
be registered in the names, and issued in any approved denominations, requested
by or on behalf of the Depositary (in accordance with its customary procedures).

CERTAIN BOOK-ENTRY PROCEDURES FOR GLOBAL NOTES. THE DESCRIPTIONS OF THE
OPERATIONS AND PROCEDURES OF DTC, THAT FOLLOW ARE PROVIDED SOLELY AS A MATTER OF
CONVENIENCE. THESE OPERATIONS AND PROCEDURES ARE SOLELY WITHIN THE CONTROL OF
DTC AND ARE SUBJECT TO CHANGES BY THEM FROM TIME TO TIME. THE COMPANY TAKES NO
RESPONSIBILITY FOR THESE OPERATIONS AND PROCEDURES AND URGES INVESTORS TO
CONTACT DTC OR ITS PARTICIPANTS DIRECTLY TO DISCUSS THESE MATTERS.

DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the

39
<PAGE>
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants ("participants") and facilitate the clearance
and settlement of securities transactions between participants through
electronic book-entry changes in accounts of its participants, thereby
eliminating the need for physical transfer and delivery of certificates.
Participants include securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other organizations. Indirect
access to the DTC system is available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants").

DTC has advised the Company that its current practice, upon the issuance of
a Global Note, is to credit, on its internal system, the respective principal
amount of the individual beneficial interests represented by such Global Note to
the accounts with DTC of the participants through which such interests are to be
held. Ownership of beneficial interests in the Global Note will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by DTC or its nominees (with respect to interests of participants) and the
records of participants and indirect participants (with respect to interests of
persons other than participants).

AS LONG AS DTC, OR ITS NOMINEE, IS THE REGISTERED HOLDER OF A GLOBAL NOTE,
DTC OR SUCH NOMINEE, AS THE CASE MAY BE, WILL BE CONSIDERED THE SOLE OWNER AND
HOLDER OF THE NOTES REPRESENTED BY SUCH GLOBAL NOTE FOR ALL PURPOSES UNDER THE
INDENTURE AND THE NOTES. Except in the limited circumstances described above
under "--Exchanges of Book-Entry Notes for Certificated Notes," owners of
beneficial interests in a Global Note will not be entitled to have any portions
of such Global Note registered in their names, will not receive or be entitled
to receive physical delivery of Notes in definitive form and will not be
considered the owners or Holders of the Global Note (or any Notes represented
thereby) under the Indenture or the Notes.

Investors may hold their interests in the Global Note directly through DTC,
if they are participants in such system, or indirectly through organizations
that are participants in such system. All interests in a Global Note will be
subject to the procedures and requirements of DTC.

The laws of some states require that certain persons take physical delivery
in definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Note to such persons may be limited to
that extent. Because DTC can act only on behalf of its participants, which in
turn act on behalf of indirect participants and certain banks, the ability of a
person having beneficial interests in a Global Note to pledge such interest to
persons or entities that do not participate in the DTC system, or otherwise take
actions in respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests.

Payments of the principal of, premium, if any, and interest on the Note will
be made to DTC or its nominee, as the case may be, as the registered owner of
the Global Note. Neither the Company, the Trustee nor any of their respective
agents will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in a
Global Note or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

The Company expects that DTC or its nominee, upon receipt of any payment of
principal or interest in respect of a Global Note representing any Notes held by
it or its nominee, will immediately credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of such Global Note for such Notes as shown on the records of
DTC or its nominee. The Company also expects that payments by participants to
owners of beneficial interests in such Global Note held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers registered
in "street name." Such payments will be the responsibility of such participants.

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<PAGE>
Interests in the Global Notes will trade in DTC's Same-Day Funds Settlement
System, and secondary market trading activity in such interests will therefore
settle in immediately available funds, subject in all cases to the rules and
procedures of DTC and its participants. Transfers between participants in DTC
will be effected in accordance with DTC's procedures, and will be settled in
same-day funds.

DTC has advised the Company that it will take any action permitted to be
taken by a holder of Notes (including the presentation of Notes for exchange as
described below and the conversion of Notes) only at the direction of one or
more participants to whose account with DTC interests in the Global Notes are
credited and only in respect of such portion of the aggregate principal amount
of the Notes as to which such participant or participants has or have given such
direction. However, if there is an Event of Default (as defined below) under the
Notes, DTC reserves the right to exchange the Global Notes for Notes in
certificated form, and to distribute such Notes to its participants.

None of the Company, the Trustee nor any of their respective agents will
have any responsibility for the performance by DTC, its participants or indirect
participants of its respective obligations under the rules and procedures
governing its operations, including maintaining, supervising or reviewing the
records relating to, or payments made on account of, beneficial ownership
interests in Global Notes.

PAYMENT AND CONVERSION

The principal of the Notes will be payable in U.S. dollars, against
surrender thereof at the office or agency of the Company designated by it for
such purpose in the Borough of Manhattan, The City of New York, and at any other
office or agency of the Company maintained for such purpose, in U.S. currency by
dollar check or by transfer to a dollar account (such a transfer to be made only
to a Holder of an aggregate principal amount of Notes in excess of $5,000,000
and only if such Holder shall have furnished wire instructions to the Trustee in
writing no later than 15 days prior to the relevant payment date) maintained by
the Holder with a bank in the United States. Payment of interest on a Note may
be made by dollar check mailed to the address of the person entitled thereto as
such address shall appear in the Security Register, or, upon written application
by the Holder to the Security Registrar setting forth instructions not later
than the relevant Record Date, by transfer to a dollar account (such a transfer
to be made only to a Holder of an aggregate principal amount of Notes in excess
of $5,000,000 and only if such Holder shall have furnished wire instructions in
writing to the Trustee no later than 15 days prior to the relevant payment date)
maintained by the Holder with a bank in the United States.

Any payment on a Note due on any day that is not a Business Day need not be
made on such day, but may be made on the next succeeding Business Day with the
same force and effect as if made on such due date. and no interest shall accrue
on such payment for the period from and after such date. "Business Day," when
used with respect to any place of payment, place of conversion or any other
place, as the case may be, means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in such place of payment,
place of conversion or other place, as the case may be, are authorized or
obligated by law or executive order to close.

Notes may be surrendered for conversion at the office or agency of the
Company in the Borough of Manhattan, The City of New York, at any other office
or agency of the Company maintained for such purpose. In the case of Global
Notes, conversion will be effected by DTC upon notice from the holder of a
beneficial interest in a Global Note in accordance with its rules and
procedures. Notes surrendered for conversion must be accompanied by a conversion
notice and any payments in respect of interest, as applicable, as described
below under "--Conversion Rights."

CONVERSION RIGHTS

The Holder of any Note will have the right, at the Holder's option, to
convert any portion of the principal amount of a Note that is an integral
multiple of $1,000 into shares of Common Stock, unless previously redeemed or
repurchased, at a conversion rate equal to the number of shares per $1,000

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<PAGE>
principal amount of Notes shown on the front cover of this Prospectus (the
"Conversion Rate"), subject to adjustment as described below. The right to
convert a Note called for redemption or delivered for repurchase will terminate
at the close of business on the Redemption Date or Repurchase Date for such
Note, unless the Company defaults in making the payment due upon redemption or
repurchase, as the case may be.

The right of conversion attaching to any Note may be exercised by the Holder
by delivering the Note at the office or agency of the Company in The Borough of
Manhattan, The City of New York, at any other office or agency of the Company
maintained for such purpose and at the office or agency of any additional
conversion agent appointed by the Company, accompanied by a duly signed and
completed notice of conversion, a copy of which may be obtained from the Trustee
and any conversion agent. The conversion date will be the date on which the Note
and the duly signed and completed notice of conversion are so delivered. As
promptly as practicable on or after the conversion date, the Company will issue
and deliver to the Trustee a certificate or certificates for the number of full
shares of Common Stock issuable upon conversion, together with payment in lieu
of any fraction of a share or, at the Company's option, rounded up to the next
whole number of shares; such certificate will be sent by the Trustee to the
Conversion Agent for delivery to the Holder. Such shares of Common Stock
issuable upon conversion of the Notes, in accordance with the provisions of the
Indenture, will be fully paid and nonassessable and will also rank PARI PASSU
with the other shares of the Common Stock outstanding from time to time.

Holders that surrender Notes for conversion on a date that is not an
Interest Payment Date are not entitled to receive any interest for the period
from the next preceding Interest Payment Date to the date of conversion, except
as described below. However, Holders of Notes on a Regular Record Date,
including Notes surrendered for conversion after the Regular Record Date, will
receive the interest payable on such Notes on the next succeeding Interest
Payment Date. Accordingly, any Note surrendered for conversion during the period
from the close of business on a Regular Record Date to the opening of business
on the next succeeding Interest Payment Date must be accompanied by payment of
an amount equal to the interest payable on such Interest Payment Date on the
principal amount of Notes being surrendered for conversion; provided, however,
that no such payment will be required upon the conversion of any Note (or
portion thereof) that has been called for redemption or that is eligible to be
delivered for repurchase if, as a result, the right to convert such Note would
terminate during the period between such Regular Record Date and the next
succeeding Interest Payment Date.

No other payment or adjustment for interest, or for any dividends in respect
of Common Stock, will be made upon conversion. Holders of Common Stock issued
upon conversion will not be entitled to receive any dividends payable to holders
of Common Stock as of any record date before the close of business on the
conversion date. No fractional shares will be issued upon conversion but, in
lieu thereof, the Company will calculate an appropriate amount to be paid in
cash on the basis set forth in the Indenture or, at its option, round up to the
next whole number of shares.

A Holder delivering a Note for conversion will not be required to pay any
taxes or duties in respect of the issue or delivery of Common Stock on
conversion. However, the Company shall not be required to pay any tax or duty
that may be payable in respect of any transfer involved in the issue or delivery
of the Common Stock in a name other than that of the Holder of the Note.
Certificates representing shares of Common Stock will not be issued or delivered
unless the person requesting such issue has paid to the Company the amount of
any such tax or duty or has established to the satisfaction of the Company that
such tax or duty has been paid.

The Conversion Rate is subject to adjustment in certain events, including
(a) dividends (and other distributions) payable in Common Stock on shares of
capital stock of the Company, (b) the issuance to all holders of Common Stock of
certain rights, options or warrants entitling them to subscribe for or purchase
Common Stock at less than the then current market price (determined as provided
in the

42
<PAGE>
Indenture) of Common Stock as of the record date for holders entitled to receive
such rights, options or warrants, (c) subdivisions, combinations and
reclassifications of Common Stock, (d) distributions to all holders of Common
Stock of evidences of indebtedness of the Company, shares of capital stock or
other property (including securities, but excluding those dividends, rights,
options, warrants and distributions referred to in clauses (a) and (b) above,
dividends and distributions paid exclusively in cash and distributions upon
mergers or consolidations to which the next succeeding paragraph applies), (e)
distributions consisting exclusively of cash (excluding any cash portion of
distributions referred to in (d) above, or cash distributed upon a merger or
consolidation to which the next succeeding paragraph applies) to all holders of
Common Stock in an aggregate amount that, combined together with (i) other such
all-cash distributions made within the preceding 12 months in respect of which
no adjustment has been made and (ii) any cash and the fair market value of other
consideration payable in respect of any tender offer by the Company or any of
its Subsidiaries for Common Stock, to the extent that the cash and value of any
other consideration included in such payment per share of Common Stock exceeds
the current market price per share of Common Stock on the trading day next
succeeding the date of payment (the "Current Market Price"), concluded within
the preceding 12 months in respect of which no adjustment has been made, exceeds
10% of the Company's market capitalization (being the product of the then
current market price of the Common Stock and the number of shares of Common
Stock then outstanding) on the record date for such distribution and (f) the
successful completion of a tender offer made by the Company or any of its
subsidiaries for Common Stock, to the extent that the cash and value of any
other consideration included in such payment per share of Common Stock exceeds
the Current Market Price at such time, the aggregate amount of which, together
with (i) any cash and other consideration in excess of the then current market
price paid in a tender offer by the Company or any of its Subsidiaries for
Common Stock expiring within the 12 months preceding the expiration of such
tender offer in respect of which no adjustment has been made and (ii) the
aggregate amount of any such all-cash distributions referred to in (a) above to
all holders of Common Stock within the 12 months preceding the expiration of
such tender offer in respect of which no adjustments have been made, exceeds 10%
of the Company's market capitalization on the expiration of such tender offer.
The Company reserves the right to make such increases in the conversion rate in
addition to those required in the foregoing provisions as it considers to be
advisable in order that any event treated for income tax purposes as a dividend
or distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock will not be taxable to the recipients. No adjustment of the
conversion rate will be required to be made until the cumulative adjustments
amount to 1.0% or more of the conversion rate. The Company shall compute any
adjustments to the conversion price pursuant to this paragraph and will give
notice to the Holders of any such adjustments.

In case of any consolidation or merger of the Company with or into another
Person or any merger of another Person into the Company (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of the Common Stock), or in the case of any conveyance, sale,
transfer or lease of all or substantially all of the properties and assets of
the Company, each Note then outstanding will, without the consent of the Holder
of any Note, become convertible only into the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, sale,
conveyance, lease or other transfer by a holder of the number of shares of
Common Stock into which such Note was convertible immediately prior thereto
(assuming such holder of Common Stock failed to exercise any rights of election
and that such Note was then convertible).

The Company from time to time may increase the Conversion Rate by any amount
for any period of at least 20 days, in which case the Company shall give at
least 15 days' notice of such increase, if the Board of Directors has made a
determination that such increase would be in the best interests of the Company,
which determination shall be conclusive. No such increase shall be taken into
account for purposes of determining whether the closing price of the Common
Stock exceeds the Conversion Price (as defined below) by 105% in connection with
an event which otherwise would be a Change of Control.

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<PAGE>
If at any time the Company makes a distribution of property to its
shareholders that would be taxable to such shareholders as a dividend for
federal income tax purposes (e.g., distributions of evidences of indebtedness or
assets of the Company, but generally not stock dividends on Common Stock or
rights to subscribe for Common Stock) and, pursuant to the anti-dilution
provisions of the Indenture, the number of shares into which Notes are
convertible is increased, such increase may be deemed for federal income tax
purposes to be the payment of a taxable dividend to Holders of Notes. See
"Certain United States Federal Tax Considerations-United States Holders".

SUBORDINATION

The payment of the principal of, premium, if any, and interest on the Notes
(including amounts payable on any redemption or repurchase) will be subordinated
in right of payment to the extent set forth in the Indenture to the prior full
and final payment of all Senior Debt of the Company. "Senior Debt" means the
principal of (and premium, if any) and interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such
proceeding) on, and all fees and other amounts (including collection expenses,
attorney's fees and late charges) owing with respect to, the following, whether
direct or indirect, absolute or contingent, secured or unsecured, due or to
become due, outstanding at the date of execution of the Indenture or thereafter
incurred, created or assumed: (a) indebtedness of the Company for money borrowed
or evidenced by bonds, debentures, notes or similar instruments, (b)
reimbursement obligations of the Company with respect to letters of credit,
bankers' acceptances and similar facilities issued for the account of the
Company, (c) every obligation of the Company issued or assumed as the deferred
purchase price of property or services purchased by the Company, excluding any
trade payables and other accrued current liabilities incurred in the ordinary
course of business, (d) obligations of the Company as lessee under leases
required to be capitalized on the balance sheet of the lessee under United
States generally accepted accounting principles, (e) obligations of the Company
under interest rate and currency swaps, caps, floors, collars or similar
arrangements intended to protect the Company against fluctuations in interest or
currency exchange rates, (f) indebtedness of others of the kinds described in
the preceding clauses (a) through (e) that the Company has assumed, guaranteed
or otherwise assured the payment thereof, directly or indirectly, and (g)
deferrals, renewals, extensions and refundings of, or amendments, modifications
or supplements to, any indebtedness or obligation described in the preceding
clauses (a) through (f) whether or not there is any notice to or consent of the
Holders of Notes; provided, however, that the following shall not constitute
Senior Debt: (i) any particular indebtedness or obligation that is owed by the
Company to any of its direct and indirect Subsidiaries and (ii) any particular
indebtedness, deferral, renewal, extension or refunding if it is expressly
stated in the governing terms or in the assumption thereof that the indebtedness
involved is not senior in right of payment to the Notes or that such
indebtedness is PARI PASSU with or junior to the Notes.

No payment on account of principal of or premium, if any, or interest on the
Notes may be made if (a) there shall have occurred and be continuing (i) a
default in the payment of any Senior Debt or (ii) any other default with respect
to any Senior Debt permitting the holders thereof to accelerate the maturity
thereof, provided that, in the case of this clause (ii), such default shall not
have been cured or waived or ceased to exist after written notice of such
default shall have been given to the Company and the Trustee by any holder of
Senior Debt, or (b) in the event any judicial proceeding shall be pending with
respect to any such default in payment or event of default. Upon any
acceleration of the principal due on the Notes or payment or distribution of
assets of the Company to creditors upon any dissolution, winding up, liquidation
or reorganization, whether voluntary or involuntary, or in bankruptcy,
insolvency, receivership or other proceedings, all amounts due on all Senior
Debt must be paid in full before the Holders of the Notes are entitled to
receive any payment. By reason of such subordination, in the event of insolvency
of the Company, creditors of the Company who are holders of Senior Debt may
recover more, ratably, than the Holders of the Notes, and such subordination may
result in a reduction or elimination of payments to

44
<PAGE>
the Holders of the Notes. As of , 1998 the Company had approximately
$ million of Senior Debt outstanding.

In addition, the Notes will be effectively subordinated to all indebtedness
and other liabilities (including trade payables and lease obligations) of the
Company's Subsidiaries.

The Indenture does not limit the ability of the Company or any of its
subsidiaries to incur indebtedness, including Senior Debt.

OPTIONAL REDEMPTION

The Notes may not be redeemed prior to the close of business on
, 2001. Thereafter, the Notes may be redeemed, in whole or in part,
at the option of the Company, upon not less than 30 nor more than 60 days' prior
notice as provided under "--Notices" below, at the redemption prices set forth
below. Such redemption prices (expressed as a percentage of principal amount)
are as follows for the 12-month period beginning on of the following years:

<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- -------------------------------------------------------------- -------------
<S> <C>
2001.......................................................... %
2002..........................................................
2003..........................................................
2004..........................................................
</TABLE>

and thereafter at a redemption price equal to 100% of the principal amount, in
each case together with accrued interest to the redemption date.

REPURCHASE AT OPTION OF HOLDERS UPON A CHANGE OF CONTROL

If a Change of Control (as defined below) occurs, each Holder of Notes shall
have the right, at the Holder's option, to require the Company to repurchase all
of such Holder's Notes, or any portion of the principal amount thereof that is
equal to $1,000 or an integral multiple of $1,000 in excess thereof, on the date
(the "Repurchase Date") that is 45 days after the date of the Company Notice (as
defined below), at a price in cash equal to 100% of the principal amount of the
Notes to be repurchased, together with interest accrued to the Repurchase Date
(the "Repurchase Price").

The Company may, at its option, in lieu of paying the Repurchase Price in
cash, pay the Repurchase Price by issuing shares of Common Stock. The number of
shares of Common Stock tendered in payment shall be determined by dividing the
Repurchase Price by the value of the Common Stock, which for this purpose shall
be equal to 95% of the average of the closing sale prices of the Common Stock
for the five consecutive Trading Days ending on and including the third Trading
Day preceding the Repurchase Date. Such payment may not be made in Common Stock
unless the Company satisfies certain conditions with respect thereto prior to
the Repurchase Date as provided in the Indenture.

On or before the 30th day after the occurrence of a Change of Control, the
Company is obligated to give to all Holders of the Notes notice, as provided in
the Indenture (the "Company Notice"), of the occurrence of such Change of
Control and of the repurchase right arising as a result thereof. To exercise the
repurchase right, a Holder of Notes must deliver on or before the fifth day
prior to the Repurchase Date irrevocable written notice to the Trustee of the
Holder's exercise of such right, together with the Notes with respect to which
the right is being exercised.

A Change of Control shall be deemed to have occurred at such time after the
original issuance of the Notes as there shall occur:

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<PAGE>
(i) the acquisition by any Person of beneficial ownership, directly or
indirectly, through a purchase, merger or other acquisition transaction or
series of transactions, of shares of capital stock of the Company entitling
such Person to exercise 50% or more of the total voting power of all shares
of capital stock of the Company entitled to vote generally in elections of
directors, other than any such acquisition by the Company or any employee
benefit plan of the Company; or

(ii) any consolidation or merger of the Company with or into any other
Person, any merger of another Person into the Company, or any conveyance,
transfer, sale, lease or other disposition of all or substantially all of
the properties and assets of the Company to another Person (other than (a)
any such transaction (x) that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock
and (y) pursuant to which holders of Common Stock immediately prior to such
transaction have the entitlement to exercise, directly or indirectly, 50% or
more of the total voting power of all shares of capital stock entitled to
vote generally in the election of directors of the continuing or surviving
person immediately after such transaction and (b) any merger which is
effected solely to change the jurisdiction of incorporation of the Company
and results in a reclassification, conversion or exchange of outstanding
shares of Common Stock solely into shares of common stock of the surviving
entity);

PROVIDED, HOWEVER, that a Change of Control shall not be deemed to have occurred
if the closing sale price per share of the Common Stock for any five Trading
Days within the period of 10 consecutive Trading Days ending immediately after
the later of the date of the Change of Control or the date of the public
announcement of the Change of Control (in the case of a Change of Control under
clause (i) above) or ending immediately before the Change of Control (in the
case of a Change of Control under clause (ii) above) shall equal or exceed 105%
of the Conversion Price of the Notes in effect on each such Trading Day. The
"Conversion Price" is equal to $1,000 divided by the Conversion Rate.
"Beneficial owner" shall be determined in accordance with Rule 13d-3 promulgated
by the Commission under the Exchange Act. "Person" includes any syndicate or
group which would be deemed to be a "person" under Section 13(d)(3) of the
Exchange Act.

The Company may, to the extent permitted by applicable law, at any time
purchase Notes in the open market or by tender at any price or by private
agreement. Subject to certain limitations imposed by the Underwriting Agreement
with the Underwriters, any Note so purchased by the Company may be reissued or
resold or may, at the Company's option, be surrendered to the Trustee for
cancellation. Any Notes surrendered as aforesaid may not be reissued or resold
and will be cancelled promptly.

The foregoing provisions would not necessarily afford Holders of the Notes
protection in the event of highly leveraged or other transactions involving the
Company that may adversely affect Holders.

MERGERS AND SALES OF ASSETS BY THE COMPANY

The Company shall not consolidate with or merge into any other Person or,
directly or indirectly, convey, transfer, sell or lease all or substantially all
of its properties and assets to any Person, and the Company shall not permit any
Person to consolidate with or merge into the Company or convey, transfer, sell
or lease all or substantially all of its properties and assets to the Company,
unless (a) the Person formed by such consolidation or into or with which the
Company is merged or the Person to which the properties and assets of the
Company are so conveyed, transferred, sold or leased, is a corporation, limited
liability company, partnership or trust organized and existing under the laws of
the United States, any State thereof or the District of Columbia and shall
expressly assume the due and punctual payment of the principal of and, premium,
if any, and interest on the Notes and the performance of the other covenants of
the Company under the Indenture and shall have provided for conversion rights as
described above under "--Conversion Rights", (b) immediately after giving effect
to such transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of

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Default, shall have occurred and be continuing, and (c) the Company shall have
provided to the Trustee an Officer's Certificate and Opinion of Counsel as
provided in the Indenture.

EVENTS OF DEFAULT

The following will be Events of Default under the Indenture: (a) failure to
pay principal of or premium, if any, on any Note when due, whether or not such
payment is prohibited by the subordination provisions of the Indenture, (b)
failure to pay any interest on any Note when due, continuing for 30 days,
whether or not such payment is prohibited by the subordination provisions of the
Indenture; (c) default in the Company's obligation to provide notice of a Change
of Control; (d) failure to perform any other material covenant or warranty of
the Company in the Indenture, continuing for 60 days after written notice to the
Company by the Trustee or the Holders of at least 10% in aggregate principal
amount of Outstanding Notes; (e) failure to pay when due the principal of, or
acceleration of, any indebtedness for money borrowed by the Company in excess of
$25 million if such indebtedness is not discharged, or such acceleration is not
annulled, within 30 days after written notice to the Company by the Trustee or
the Holders of at least 10% in aggregate principal amount of Outstanding Notes;
and (f) certain events of bankruptcy, insolvency or reorganization of the
Company. Subject to the provisions of the Indenture relating to the duties of
the Trustee in case an Event of Default shall occur and be continuing, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to the Trustee reasonable indemnity. Subject to
such provisions for the indemnification of the Trustee, the Holders of a
majority in aggregate principal amount of the Outstanding Notes will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee.

If an Event of Default (other than an Event of Default specified in clause
(f) above) occurs and is continuing, either the Trustee or the Holders of not
less than 10% in aggregate principal amount of the Outstanding Notes may
accelerate the maturity of all Notes. If an Event of Default specified in clause
(f) occurs and is continuing, the principal of and any accrued interest on all
of the Notes then Outstanding shall ipso facto become due and payable
immediately without any declaration or other act on the part of the Trustee or
any Holder.

At any time after a declaration of acceleration has been made but before a
judgment or decree based on acceleration has been issued, the Holders of a
majority in aggregate principal amount of Outstanding Notes may, under certain
circumstances as set forth in the Indenture, rescind and annul such acceleration
if all Events of Default, other than the nonpayment of accelerated principal and
interest, have been cured or waived as provided in the Indenture. For
information as to waiver of defaults, See "--Modification and Waiver."

No Holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless also the Holders of at least 10% in aggregate principal
amount of the Outstanding Notes shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee,
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of the Outstanding Notes a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days. However, such limitations do not apply to a suit instituted by a Holder of
a Note for the enforcement of payment of the principal of or premium, if any, or
interest on such Note on or after the respective due dates expressed in such
Note or of the right to convert such Note in accordance with the Indenture.

The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.

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<PAGE>
MODIFICATION AND WAIVER

The Indenture will contain provisions permitting the Company and the Trustee
to enter into a supplemental indenture for certain limited purposes without the
consent of the Holders. Generally, modifications and amendments of the Indenture
can only be made with the written consent of the Holders of not less than a
majority in principal amount of the Notes at the time Outstanding. However, no
such modification or amendment may, without the consent of the Holder of each
Outstanding Note affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of interest on, any Note, (b) reduce the
principal amount of, or the premium, if any, or rate of interest on, any Note,
(c) modify the provisions with respect to the repurchase right of the Holders in
a manner adverse to the Holders, (d) change the place or currency of payment of
principal of, premium, if any, or interest on any Note, (e) impair the right to
institute suit for the enforcement of any payment on or with respect to, or the
right to convert, any Note, (f) except as otherwise permitted or contemplated by
provisions concerning consolidation, merger, conveyance, transfer, sale or lease
of all or substantially all of the property and assets of the Company, adversely
affect the right to convert Notes, (g) modify the subordination provisions in a
manner adverse to the Holders of the Notes or (h) reduce the above-stated
percentage of aggregate principal amount of Outstanding Notes necessary for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults.

The Holders of a majority in aggregate principal amount of Outstanding Notes
may waive compliance by the Company with certain restrictive provisions of the
Indenture. The Holders of a majority in aggregate principal amount of the
Outstanding Notes may waive any past default by the Company under the Indenture,
except a default in the payment of principal, premium, if any, or interest or a
default in any covenant or provision which under the Indenture cannot be
modified or amended without the consent of each Holder of Outstanding Notes.

NOTICES

Notice to Holders of the Notes will be given by mail to the addresses of
such Holders as they appear in the Security Register. Such notices will be
deemed to have been given on the date of mailing of the notice.

Notice of a redemption of Notes will be given at least once not less than 30
nor more than 60 days prior to the Redemption Date (which notice shall be
irrevocable) and will specify the Redemption Date and the Redemption Price.

PAYMENT OF STAMP AND OTHER TAXES

The Company shall pay all stamp and other duties, if any, which may be
imposed by the United States or any political subdivision thereof or taxing
authority thereof or therein with respect to the issuance of the Notes. The
Company will not be required to make any payment with respect to any other tax,
assessment or governmental charge imposed by any government or any political
subdivision thereof or taxing authority therein.

GOVERNING LAW

The Indenture and the Notes will be governed by and construed in accordance
with the laws of the State of New York without regard to conflict of laws
provisions.

THE TRUSTEE

The Trustee for the holders of Notes issued under the Indenture will
be .

48
<PAGE>
CERTAIN FEDERAL TAX CONSIDERATIONS

The following is a summary of certain material United States federal income
tax considerations relating to the purchase, ownership and disposition by United
States Holders of the Notes and of Common Stock into which Notes may be
converted, but does not purport to be a complete analysis of all the potential
tax considerations relating thereto. This summary is based on laws, regulations,
rulings and decisions now in effect, all of which are subject to change,
possibly on a retroactive basis. This summary deals only with holders that will
hold Notes and Common Stock into which Notes may be converted as "capital
assets" (within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the "Code")), and does not address tax considerations
applicable to (i) investors that may be subject to special tax rules, such as
banks, tax-exempt organizations, insurance companies, broker-dealers, traders in
securities that elect to mark to market, (ii) persons that will hold Notes as a
position in a hedging transaction, "straddle" or "conversion transaction" for
tax purposes, (iii) persons other than United States Holders or (iv) persons who
have a "functional currency" other than the U.S. dollar. As used herein, the
term "United States Holder" means a beneficial holder of Notes or Common Stock
received on conversion of the Notes that is for United States federal income tax
purposes (1) a citizen or resident of the United States, (2) a corporation
organized under the laws of the United States or any State, (3) an estate the
income of which is subject to the United States federal income taxation
regardless of its source, (4) a trust if (i) a court within the United States is
able to exercise primary supervision over the trust's administration and (ii)
one or more U.S. persons have the authority to control all of the trust's
substantial decisions or (5) a partnership to the extent the interest therein is
owned by a person described in clause (1), (2), (3) or (4) of this sentence.
This summary discusses the tax considerations applicable to an initial purchaser
of the Notes who purchases the Notes at their "issue price" as defined in
Section 1273 of the Code and does not discuss the tax considerations applicable
to subsequent purchasers of the Notes. Moreover, the effect of any applicable
state, local or foreign tax law is not discussed. The Company has not sought any
ruling from the Internal Revenue Service (the "Service") with respect to the
statements made and the conclusions reached in the following summary, and there
can be no assurance that the Service will agree with such statements and
conclusions.

INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX
LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING
UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY
APPLICABLE TAX TREATY.

PAYMENT OF INTEREST

Interest on a Note generally will be includable in the income of a United
States Holder as ordinary income at the time such interest is received or
accrued, in accordance with such holder's method of accounting for United States
federal income tax purposes.

SALE, EXCHANGE OR REDEMPTION OF THE NOTES

Upon the sale, exchange or redemption of a Note (other than the conversion
of a Note into Common Stock), a United States Holder generally will recognize
capital gain or loss equal to the difference between (i) the amount of cash, and
the fair market value of any other property, received on the sale, exchange or
redemption (except to the extent such amount is attributable to accrued interest
income not previously included in income, which is taxable as ordinary income)
and (ii) such holder's adjusted tax basis in the Note. A United States Holder's
adjusted tax basis in a Note generally will equal the cost of the Note to such
holder. Generally, such gain or loss will be capital gain or loss and will be
long-term capital gain or loss if the United States Holder's holding period in
the Note is more than one year at the time of sale, exchange or redemption.
Long-term capital gain of a non-corporate United States Holder is generally
subject to a maximum tax rate of 28% in respect of property with a holding
period of more than

49
<PAGE>
one year and to a maximum tax rate of 20% in respect of property with a holding
period of more than 18 months. The characterization of income as capital gain or
loss is also relevant for purposes of, among other things, limitations with
respect to the deductibility of capital losses.

CONSTRUCTIVE DISTRIBUTIONS

If at any time (i) the Company makes a distribution of cash or property to
its stockholders (including distributions of evidences of indebtedness or
assets, but generally not stock dividends or rights to subscribe for Common
Stock) or purchases Common Stock and such distribution or purchase would be
taxable to such stockholders as a dividend for United States federal income tax
purposes and, pursuant to the antidilution provisions of the Indenture, the
conversion rate of the Notes is increased or (ii) the conversion rate of the
Notes is increased at the discretion of the Company, such increase in conversion
rate may be deemed to be the payment of a taxable dividend to Holders of Notes
(pursuant to Section 305 of the Code). Holders of Notes might therefore be
required to recognize taxable income as a result of an event pursuant to which
they received no cash or property.

CONVERSION OF THE NOTES

A United States Holder generally will not recognize any income, gain or loss
upon conversion of a Note into Common Stock except with respect to cash received
in lieu of a fractional share of Common Stock. A holder's tax basis in the
Common Stock received on conversion of a Note will be the same as such holder's
adjusted tax basis in the Note at the time of conversion (reduced by any basis
allocable to a fractional share interest for which cash is received), and the
holding period for the Common Stock received on conversion will generally
include the holding period of the Note converted.

Cash received in lieu of a fractional share of Common Stock upon conversion
will be treated as a payment in exchange for the fractional share of Common
Stock. Accordingly, the receipt of cash in lieu of a fractional share of Common
Stock generally will result in capital gain or loss (measured by the difference
between the cash received for the fractional share and the United States
Holder's adjusted tax basis in the fractional share).

DISTRIBUTIONS

The gross amount of a distribution with respect to the Common Stock will be
treated as a dividend taxable as ordinary income on the date of receipt, to the
extent of the Company's current and accumulated earnings and profits as
determined for United States federal income tax purposes. Distributions in
excess of such current and accumulated earnings and profits will first
constitute a non-taxable return of capital to the extent thereof, and then as a
capital gain realized on the disposition of the Common Stock. The portion of any
distribution treated as a non-taxable return of capital will reduce such United
States Holder's tax basis in such Common Stock. Subject to certain limitations,
a United States Holder of Common Stock that is a corporation and that receives
dividends on Common Stock generally will be eligible for a dividends-received
deduction equal to 70% of the dividends received.

Section 1059 of the Code requires a corporate stockholder to reduce its
basis (but not below zero) in the Common Stock by the "nontaxed portion" of any
"extraordinary dividend" if the holder has not held its Common Stock for more
than two years as of the date the amount or payment of such dividend is agreed
to, announced or declared. Generally, the nontaxed portion of an extraordinary
dividend is the amount excluded from income under Section 243 of the Code
(relating to the dividends-received deduction). A corporate stockholder is
required to immediately recognize gain to the extent that its tax basis would
have been reduced below zero.

50
<PAGE>
SALE OF COMMON STOCK

Upon the sale or exchange of Common Stock, a United States Holder generally
will recognize capital gain or loss equal to the difference between (i) the
amount of cash, and the fair market value of any other property, received upon
the sale or exchange and (ii) such holder's adjusted tax basis in the Common
Stock. Such capital gain or loss will be subject to the rules relating to tax
rates and holding periods discussed above under "Sale, Exchange or Redemption of
the Notes". A United States Holder's basis and holding period in Common Stock
received upon conversion of a Note are determined as discussed above under
"Conversion of the Notes."

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX

In general, information reporting requirements will apply to payments to
certain noncorporate United States Holders of (i) principal, premium, if any,
and interest on a Note, (ii) dividends on Common Stock, (iii) proceeds of the
sale of a Note and (iv) proceeds of the sale of Common Stock. In addition, a 31%
backup withholding tax may apply to such payments if the United States Holder
(i) fails to furnish or certify his correct taxpayer identification number to
the payor in the manner required, or (ii) does not otherwise establish his
entitlement to an exemption. Any amounts withheld under the backup withholding
rules from a payment to a United States Holder will be allowed as a credit
against such holder's United States federal income tax and may entitle the
United States Holder to a refund, provided that the required information is
furnished to the Service.

51
<PAGE>
VALIDITY OF THE SECURITIES

The validity of the Notes offered hereby will be passed upon for the Company
by Baker & McKenzie, Miami, Florida, and for the Underwriters by Sullivan &
Cromwell, Washington, DC.

EXPERTS

The consolidated financial statements included in this Prospectus have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report appearing herein and elsewhere in the Registration Statement and are
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Commission. Reports, proxy statements and other information
filed by the Company may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices located at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, 7th Floor, New York, New York 10048. Copies of such materials may be
obtained from the web site that the Commission maintains at http://www.sec.gov.
In addition, such material may also be inspected and copied at the offices of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005,
and the Pacific Stock Exchange, Incorporated, 301 Pine Street, San Francisco,
California 94104.

This Prospectus constitutes part of a Registration Statement filed by the
Company with the Commission under the Securities Act. This Prospectus omits
certain of the information contained in the Registration Statement in accordance
with the rules and regulations of the Commission. Reference is hereby made to
the Registration Statement and related exhibits for further information with
respect to the Company and the Notes. Statements contained herein concerning the
provisions of any document are not necessarily completed and, in each instance,
where a copy of such document has been filed as an exhibit to the Registration
Statement or otherwise has been filed with the Commission, reference is made to
the copy so filed. Each such statement is qualified in its entirety by such
reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed with the Commission (File No. 0-23198)
pursuant to the Exchange Act are incorporated herein by reference:

1. Annual Report on Form 10-K for the fiscal year ended December 26,
1997;

2. Proxy Statement for the Annual Meeting of Stockholders held on May
7, 1998, as supplemented; and

3. All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the
offering made hereby.

The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents which are incorporated herein by reference, other than exhibits to
such information (unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to the Company, 2050
Spectrum Boulevard, Fort Lauderdale, FL 33309, Attention: Dierdre A. Skolfield,
telephone: (954) 938-7600.
------------------------

Any statement contained in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified shall not be deemed to
constitute a part of this Prospectus except as so modified, and any statement so
superseded shall not be deemed to constitute part of this Prospectus.

52
<PAGE>
INTERIM SERVICES INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Independent Auditors' Report......................................................... F-2

Consolidated Statements of Earnings for the Years Ended December 26, 1997, December
27, 1996 and December 29, 1995..................................................... F-3

Consolidated Balance Sheets as of December 26, 1997 and December 27, 1996............ F-4

Consolidated Statements of Stockholders' Equity for the Years Ended December 26,
1997, December 27, 1996 and December 29, 1995...................................... F-5

Consolidated Statements of Cash Flows for the Years Ended December 26, 1997, December
27, 1996 and December 29, 1995..................................................... F-6

Notes to Consolidated Financial Statements........................................... F-7
</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors
of Interim Services Inc.
Fort Lauderdale, Florida

We have audited the accompanying consolidated balance sheets of Interim
Services Inc. and subsidiaries (the "Company") as of December 26, 1997 and
December 27, 1996, and the related consolidated statements of earnings,
stockholders' equity and cash flows for each of the three years in the period
ended December 26, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Interim Services Inc. and
subsidiaries as of December 26, 1997 and December 27, 1996, and the results of
their operations and their cash flows for each of the three years in the period
ended December 26, 1997, in conformity with generally accepted accounting
principles.

/s/ Deloitte & Touche LLP
Fort Lauderdale, Florida
February 5, 1998

F-2
<PAGE>
INTERIM SERVICES INC.

CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
DEC. 26, DEC. 27, DEC. 29,
1997 1996 1995
---------- ---------- ---------
<S> <C> <C> <C>
Revenues................................................. $1,608,256 $1,147,151 $ 864,247
Cost of services......................................... 1,081,113 795,789 600,169
---------- ---------- ---------
Gross profit....................................... 527,143 351,362 264,078
---------- ---------- ---------
Selling, general and administrative expenses............. 363,152 243,652 177,105
Licensee commissions..................................... 45,091 39,500 37,295
Amortization of intangibles.............................. 18,492 8,802 6,884
Interest expense......................................... 24,269 5,696 990
Gain on sale of HealthCare business...................... (5,300) -- --
Merger expense........................................... -- 8,600 --
---------- ---------- ---------
445,704 306,250 222,274
---------- ---------- ---------
Earnings before taxes.............................. 81,439 45,112 41,804
Income taxes............................................. 38,928 22,097 18,071
---------- ---------- ---------
Net earnings....................................... $ 42,511 $ 23,015 $ 23,733
---------- ---------- ---------
---------- ---------- ---------
Basic earnings per share................................. $ 1.08 $ 0.71 $ 0.77
---------- ---------- ---------
---------- ---------- ---------
Diluted earnings per share............................... $ 1.05 $ 0.69 $ 0.76
---------- ---------- ---------
---------- ---------- ---------
Basic weighted average shares outstanding................ 39,305 32,450 30,804
---------- ---------- ---------
---------- ---------- ---------
Diluted weighted average shares outstanding.............. 40,407 33,418 31,324
---------- ---------- ---------
---------- ---------- ---------
</TABLE>

See notes to Consolidated Financial Statements.

F-3
<PAGE>
INTERIM SERVICES INC.

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS

<TABLE>
<CAPTION>
DEC. 26, DEC. 27,
1997 1996
---------- ---------
<S> <C> <C>
Current Assets:
Cash and cash equivalents.......................................... $ 15,570 $ 18,938
Marketable securities.............................................. -- 7,499
Receivables, less allowance for doubtful accounts of $5,229 and
$3,023........................................................... 230,947 186,732
Insurance deposits................................................. 23,974 32,794
Other current assets............................................... 37,610 18,301
---------- ---------
Total current assets............................................. 308,101 264,264
Goodwill, net........................................................ 475,656 173,638
Tradenames and other intangibles, net................................ 219,472 1,109
Property and equipment, net.......................................... 65,475 49,795
Other assets......................................................... 23,030 23,684
---------- ---------
$1,091,734 $ 512,490
---------- ---------
---------- ---------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt.................................. $ 33,827 $ --
Accounts payable and other accrued expenses........................ 86,489 27,092
Accrued salaries, wages, and payroll taxes......................... 65,256 40,948
Accrued self-insurance losses...................................... 28,466 26,782
Accrued income taxes............................................... 20,853 159
---------- ---------
Total current liabilities.......................................... 234,891 94,981
Long-Term Debt....................................................... 379,197 --
Deferred Tax Liability............................................... 4,054 2,798
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, par value $.01 per share; authorized 2,500,000
shares; none issued or outstanding............................... -- --
Common stock, par value $.01 per share; authorized 50,000,000
shares; issued and outstanding 39,745,761 and 38,953,368
shares........................................................... 397 390
Additional paid-in capital......................................... 260,067 251,041
Treasury stock..................................................... -- (460)
Retained earnings.................................................. 206,461 163,950
Cumulative translation adjustment.................................. 6,667 (210)
---------- ---------
Total stockholders' equity....................................... 473,592 414,711
---------- ---------
$1,091,734 $ 512,490
---------- ---------
---------- ---------
</TABLE>

See notes to Consolidated Financial Statements.

F-4
<PAGE>
INTERIM SERVICES INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA )
<TABLE>
<CAPTION>
UNREALIZED
ADDITIONAL GAIN (LOSS) ON CUMULATIVE
COMMON PAID-IN TREASURY MARKETABLE RETAINED TRANSLATION
STOCK CAPITAL STOCK SECURITIES EARNINGS ADJUSTMENT
------------- ----------- ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of December 30, 1994......... $ 308 $ 85,915 $ -- $ (72) $ 118,883 $ (135)
Net earnings............................ -- -- -- -- 23,733 --
Transactions of pooled Company.......... -- (1,349) -- 98 (1,308) --
Change in foreign currency translation
adjustment............................ -- -- -- -- -- (185)
Proceeds from exercise of employee stock
options............................... -- 401 -- -- -- --
----- ----------- ----------- --- ----------- -------------
Balance as of December 29, 1995......... 308 84,967 -- 26 141,308 (320)
Net earnings............................ -- -- -- -- 23,015 --
Transactions of pooled Company.......... -- 271 -- -- (373) --
Change in foreign currency translation
adjustment............................ -- -- -- -- -- 110
Proceeds from exercise of employee stock
option................................ 2 3,116 -- -- -- --
Sale of 7,900,000 shares of common stock
in a public offering, net............. 80 162,595 -- -- -- --
Repurchase of 26,356 shares............. -- -- (460) -- -- --
Other................................... -- 92 -- (26) -- --
----- ----------- ----------- --- ----------- -------------
Balance as of December 27, 1996......... 390 251,041 (460) -- 163,950 (210)
Net earnings............................ -- -- -- -- 42,511 --
Change in foreign currency translation
adjustment............................ -- -- -- -- -- 6,877
Proceeds from exercise of employee stock
options, including tax benefit........ 7 8,744 460 -- -- --
Other................................... -- 282 -- -- -- --
----- ----------- ----------- --- ----------- -------------
Balance as of December 26, 1997......... $ 397 $ 260,067 $ -- $ -- $ 206,461 $ 6,667
----- ----------- ----------- --- ----------- -------------
----- ----------- ----------- --- ----------- -------------

TOTAL
---------
<S> <C>
Balance as of December 30, 1994......... $ 204,899
Net earnings............................ 23,733
Transactions of pooled Company.......... (2,559)
Change in foreign currency translation
adjustment............................ (185)
Proceeds from exercise of employee stock
options............................... 401
---------
Balance as of December 29, 1995......... 226,289
Net earnings............................ 23,015
Transactions of pooled Company.......... (102)
Change in foreign currency translation
adjustment............................ 110
Proceeds from exercise of employee stock
option................................ 3,118
Sale of 7,900,000 shares of common stock
in a public offering, net............. 162,675
Repurchase of 26,356 shares............. (460)
Other................................... 66
---------
Balance as of December 27, 1996......... 414,711
Net earnings............................ 42,511
Change in foreign currency translation
adjustment............................ 6,877
Proceeds from exercise of employee stock
options, including tax benefit........ 9,211
Other................................... 282
---------
Balance as of December 26, 1997......... $ 473,592
---------
---------
</TABLE>

See notes to Consolidated Financial Statements.

F-5
<PAGE>
INTERIM SERVICES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
DEC. 26, DEC. 27, DEC. 29,
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Earnings............................................... $ 42,511 $ 23,015 $ 23,733
Adjustments to reconcile net earnings to net cash from
operating activities:
Depreciation and amortization............................ 34,874 18,911 14,556
Deferred income tax (benefit) expense.................... (5,654) 687 (74)
Gain on sale of HealthCare business...................... (5,300) -- --
Changes in assets and liabilities, net of effects of
acquisitions:
Receivables............................................ (48,288) (40,724) (27,458)
Other assets........................................... (12,615) (18,253) (17,999)
Accounts payable and accrued liabilities............... 50,772 8,828 14,030
Other.................................................. 1,457 1,437 (226)
--------- --------- ---------
Net Cash (Used in) Provided by Operating
Activities......................................... 57,757 (6,099) 6,562
--------- --------- ---------

Cash Flows from Investing Activities:
Acquisitions, net of cash acquired......................... (570,356) (11,964) (98,955)
Proceeds from the sale of HealthCare business, net......... 113,109 -- --
Capital expenditures....................................... (24,913) (32,982) (11,303)
Net proceeds from sale (purchase) of marketable
securities............................................... 7,499 15,631 (5,174)
--------- --------- ---------
Net Cash Used in Investing Activities.................. (474,661) (29,315) (115,432)
--------- --------- ---------

Cash Flows from Financing Activities:
Debt proceeds.............................................. 509,019 -- 108,218
Debt repayments............................................ (101,911) (114,727) --
Proceeds from stock offering............................... -- 163,114 --
Other...................................................... 6,428 1,940 (2,195)
--------- --------- ---------
Net Cash Provided by Financing Activities.............. 413,536 50,327 106,023
--------- --------- ---------

Increase (decrease) in cash and cash equivalents............. (3,368) 14,913 (2,847)
Cash and cash equivalents, beginning of period............... 18,938 4,025 6,872
--------- --------- ---------
Cash and cash equivalents, end of period..................... $ 15,570 $ 18,938 $ 4,025
--------- --------- ---------
--------- --------- ---------

Supplement Cash Flow Information:
Income taxes paid.......................................... $ 37,917 $ 21,602 $ 17,570
--------- --------- ---------
--------- --------- ---------

Interest paid.............................................. $ 21,316 $ 6,546 $ 1,452
--------- --------- ---------
--------- --------- ---------
</TABLE>

See notes to Consolidated Financial Statements.

F-6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS. Interim Services Inc. (the "Company" or "Interim") is a world
leader in staffing, consulting and career management services, including
flexible staffing, full-time placement, executive search, human resources
consulting, workforce management and outplacement. The Company offers a wide
range of skills including information technology, legal, accounting and finance,
human resources, technical, clerical, administrative and light industrial. The
Company operates through a network of offices throughout the United States,
Australia, Canada, France, Germany, Hong Kong, Italy, New Zealand, Spain,
Singapore, The Netherlands and the United Kingdom.

PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries. All material
intercompany transactions and balances have been eliminated.

USE OF ESTIMATES. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Due to the inherent uncertainty involved in making
estimates, actual results reported in future periods may be based upon amounts
which differ from those estimates.

FISCAL YEAR. The Company's fiscal year is comprised of 52 or 53 weeks,
ending on the last Friday in December. The fiscal years ended December 26, 1997,
December 27, 1996 and December 29, 1995 were all 52 weeks.

CASH AND CASH EQUIVALENTS. The Company considers all highly liquid
investments with original maturities of 90 days or less at the time of purchase
to be cash equivalents. Cash equivalents are carried at cost which approximates
fair value.

MARKETABLE SECURITIES. Marketable securities are comprised of readily
marketable debt securities with remaining maturities of more than 90 days at the
time of purchase. The Company has classified its investment portfolio as trading
securities and the carrying value of such securities has been adjusted to fair
market value, which was not materially different from cost.

ALLOWANCE FOR DOUBTFUL ACCOUNTS. The Company carries accounts receivable at
the amount it estimates to be collectible. Accordingly, the Company provides
allowances for accounts receivable it estimates to be uncollectible based on
management's best estimates. Recoveries are recognized in the period they are
received. The ultimate amount of accounts receivable that become uncollectible
could differ from those estimated.

INTANGIBLE ASSETS. Intangible assets consist principally of goodwill and
tradenames and are being amortized on a straight-line basis over periods of
approximately 38 years. The Company evaluates the recoverability of intangible
assets, as well as amortization periods, to determine whether an adjustment to
carrying values or a revision to estimated useful lives is appropriate.
Recoverability is determined through evaluation of anticipated cash flows on an
undiscounted basis. If the estimated future cash flows are projected to be less
than the carrying value, an impairment write-down would be recorded.

PROPERTY AND EQUIPMENT. Property and equipment are stated at cost and
depreciated using the straight-line method over the estimated useful lives of
the related assets. Leasehold improvements are

F-7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
amortized over the shorter of their estimated useful life or the lease term
using the straight-line method. Maintenance and repairs which do not improve or
extend the life of an asset are expensed as incurred.

ACCRUED SELF-INSURANCE LOSSES. The Company retains a portion of the risk
under its workers' compensation, general liability and professional liability
insurance programs. Reserves have been recorded which reflect the discounted
estimated liabilities including claims incurred but not reported. Losses have
been discounted at approximately 5.8% and 6.2% at December 26, 1997 and December
27, 1996, respectively. Such liabilities are necessarily based on estimates and,
while management believes that the amount is adequate, there can be no assurance
that changes to management's estimates may not occur due to limitations inherent
in the estimation process. Changes in the estimates of these accruals are
charged or credited to income in the period determined. The Company funds
portions of its retained risks through deposits with insurance carriers and
others. These deposits are reflected as insurance deposits on the accompanying
Consolidated Balance Sheets and reflect the estimated fair market value of such
amounts.

FOREIGN CURRENCY TRANSLATION. The Company's foreign operations use the
local currency as their functional currency. Assets and liabilities of these
operations are translated at the exchange rates in effect on the balance sheet
date. Income statement items are translated at the average exchange rates for
the year. The impact of currency fluctuation is included in stockholders' equity
as a translation adjustment.

REVENUE RECOGNITION. The Company generates revenues from sales of services
by its own branch and licensed operations and from royalties earned on sales of
services by its franchise operations. Franchise royalties, which are included in
revenues, were $23,091, $27,009 and $24,316 for the years ended December 26,
1997, December 27, 1996 and December 29, 1995, respectively. Revenues and the
related labor costs and payroll taxes are recorded in the period in which
temporary staffing services are performed. Revenues on placements are recognized
when services provided are substantially completed. Allowances are established
to estimate losses due to placed candidates not remaining employed for the
Company's guarantee period.

THE COMPANY UTILIZES TWO FORMS OF FRANCHISING AGREEMENTS. Under the first
form, the Company records franchise royalties, based upon the contractual
percentage of franchise sales, in the period in which the franchise provides the
service. Under the second form (termed "licensee" by the Company), revenues
generated by the licensee and related direct costs are included as part of the
Company's revenues and cost of services, respectively. The net distribution paid
to the licensee is based upon a percentage of the gross profit generated, and is
captioned "licensee commissions" in the Consolidated Statements of Earnings.

INCOME TAXES. The Company accounts for income taxes under an asset and
liability approach, which requires the recognition of deferred tax assets and
liabilities for expected future tax consequences of temporary differences
between tax bases and financial reporting bases of assets and liabilities. The
Company's policy is to not provide deferred taxes on temporary differences
related to investment in foreign subsidiaries as they are considered permanent
in duration. These differences, primarily undistributed foreign earnings, were
not material at December 26, 1997.

EARNINGS PER SHARE. Basic earnings per share is computed by dividing the
Company's net income by the weighted average number of shares outstanding during
the period.

F-8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Diluted earnings per share is computed by dividing the Company's net income
by the weighted average number of shares outstanding and the dilutive impact of
common stock equivalents, primarily stock options. The dilutive impact of common
stock equivalents is determined by applying the treasury stock method.

On August 7, 1997, the Company announced a two-for-one stock split in the
form of a 100% stock dividend, to stockholders of record as of the close of
business on August 18, 1997, payable on September 5, 1997. All shares
outstanding and per share amounts have been restated to reflect the stock split.

DERIVATIVE FINANCIAL INSTRUMENTS. The Company enters into interest rate
swap agreements and foreign exchange forward contracts as part of the management
of its interest rate and foreign currency exchange rate exposures; it has no
derivative financial instruments held for trading purposes and none of the
instruments are leveraged. All financial instruments are put into place to hedge
specific exposures. Amounts to be paid or received under swap agreements are
recognized over the terms of the agreements as adjustments to interest expense.
Amounts receivable or payable under the agreements are included in receivables
or accrued expenses in the accompanying Consolidated Balance Sheets. Gains and
losses on foreign currency forward contracts offset gains and losses resulting
from the underlying transactions. Gains and losses on contracts that hedge
specific foreign currency commitments are deferred and recorded in net income in
the period in which underlying transaction is recorded.

STOCK BASED COMPENSATION. The Company has chosen to account for stock-based
compensation to employees using the intrinsic value method as prescribed by
Accounting Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued
to Employees," and related Interpretations. Accordingly, compensation cost for
stock options issued to employees is measured as the excess, if any, of the
quoted market price of the Company's stock at the date of grant over the amount
an employee must pay for the stock. Compensation cost related to restricted
stock granted as part of bonus compensation is recognized in the period the
bonus is earned and measured using the quoted market price on the effective
grant date. Compensation cost related to stock options of non-employees is
recorded at fair value (in accordance with SFAS No. 123).

NEW ACCOUNTING PRONOUNCEMENTS. In June 1997, Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," was
issued. SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains, and losses)
in a full set of general-purpose financial statements. SFAS No. 130 requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. SFAS No. 130
is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods provided for
comparative purposes is required. The Company will adopt this standard in 1998.

In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information," was issued. SFAS No. 131 establishes standards for the way
that public companies report selected information about operating segments in
annual financial statements and require that those companies report selected
information about segments in interim financial reports issued to shareholders.
It also establishes standards for related disclosures about products and
services, geographic areas and major customers and supercedes SFAS No. 14,
"Financial Reporting for Segments of a Business

F-9
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Enterprise." SFAS No. 131 is effective for financial statements for periods
beginning after December 15, 1997. The Company has historically reported its
information under one segment. This standard will require the Company to report
financial information consistent with how the business is managed. The Company
manages its business primarily by skills provided, and thus expects this will
determine its segments to comply with the new standard. The Company will adopt
this standard in 1998.

ACQUISITIONS AND DISPOSITION

ACQUISITIONS

MICHAEL PAGE GROUP, PLC. On April 18, 1997, the Company completed the
purchase of the outstanding shares of Michael Page Group, PLC ("Michael Page"),
a public company in the United Kingdom, for $577,575. Michael Page provides
staffing and placement services primarily in the fields of finance and
accounting with 51 offices in 11 countries. This acquisition was accounted for
under the purchase method of accounting. Accordingly, the operations of Michael
Page are included in the Consolidated Statement of Earnings from the date of
acquisition. The excess of the purchase price over the fair value of the net
tangible assets acquired was $512,469. This amount has been allocated to trade
names and goodwill based upon an independent valuation performed to assist
management in this allocation. Both intangible assets are being amortized over
40 years.

BRANDON SYSTEMS CORPORATION. On May 23, 1996, the Company completed its
merger with Brandon Systems Corporation ("Brandon"), an information technology
staffing company. The Company issued 7,745,380 shares of its common stock in
exchange for 100% of the outstanding shares of Brandon common stock. In
addition, Brandon stock options outstanding at the effective time of the merger
were converted into options to purchase an aggregate of 415,184 additional
Interim common shares. The merger has been accounted for as a
pooling-of-interests for accounting and financial reporting purposes.
Accordingly, the historical financial statements for the periods prior to the
merger are restated as though the companies had been combined. All fees and
expenses related to the merger and the consolidation and restructuring of the
combined companies have been expensed. Such fees and expenses were $8,600.

Revenues of Brandon from periods prior to the merger are included in the
accompanying income statements and were $22,311 for the quarter ended March 29,
1996 and $83,361 for the year ended December 29, 1995. Net earnings and earnings
per share related to Brandon were $1,244 and $0.04, respectively, for the
quarter ended March 29, 1996 and $6,206 and $0.20, respectively, for the year
ended December 29, 1995.

COMPUTER POWER GROUP. Effective December 1, 1995, the Company acquired the
U.S. and U.K. based assets of Computer Power Group ("CPG"), a subsidiary of
Australia-based Computer Power Group, Ltd., for $71,000 in cash. CPG provides
staffing and consulting services in a variety of information technology
disciplines. This acquisition was accounted for under the purchase method of
accounting. Accordingly, the operations of CPG are included in the Consolidated
Statements of Earnings from the date of acquisition. The excess of the purchase
price over the fair value of the net tangible assets acquired (goodwill) was
$56,618 and is being amortized over 40 years.

F-10
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

ACQUISITIONS AND DISPOSITION (CONTINUED)
OTHER ACQUISITIONS. During 1997, 1996 and 1995 the Company made certain
other acquisitions that were accounted for under the purchase method of
accounting. Their operations are included in the Consolidated Statements of
Earnings from the date of acquisition.

The fair value of assets acquired and liabilities assumed (excluding cash
acquired) in connection with the acquisitions follows.

<TABLE>
<CAPTION>
DEC. 26, DEC. 27, DEC. 29,
1997 1996 1995
--------- ----------- -----------
<S> <C> <C> <C>
Working capital (deficit).................................... $ (8,456) $ 615 $ 9,620
Goodwill and Tradenames...................................... 563,802 12,016 86,715
Other net assets............................................. 15,327 (667) 3,029
Debt assumed................................................. (317) -- (409)
--------- ----------- -----------
Net assets acquired.......................................... $ 570,356 $ 11,964 $ 98,955
--------- ----------- -----------
--------- ----------- -----------
</TABLE>

DISPOSITION

HEALTHCARE DIVISION. On September 26, 1997, the Company completed the sale
of its HealthCare business to Cornerstone Equity Investors IV, L.P. ("Buyer").
The Company received $118,590 in cash at closing ($113,109 net of transaction
related cash costs), with the remainder of the $134,000 purchase price to be
paid upon approval of the ownership transfer of Interim HealthCare of New York
Inc. to the Buyer by New York State regulators. Accordingly, recognition of the
remaining portion of the gain on sale has been postponed pending this final
approval. The pre-tax gain on sale recognized in 1997 was $5,300 with taxes on
the gain of $5,272. Revenues, prior to the sale, related to the HealthCare
business were $189,589, $231,268, $207,242 for the years ended December 26,
1997, December 27, 1996, and December 29, 1995, respectively.

Pursuant to the terms of the sales agreement and subject to certain
restrictions, the Company gave the Buyer a royalty-free license to use the
"Interim" trademark and trade names for an initial period of five years. After
that time, a license fee will be charged. Under a transitional service
agreement, the Company will continue to provide various services to the Buyer
including access to and use of information systems. These services will be
provided at rates included in the agreement which approximate the costs the
Company will incur. This service agreement is for two years with an option to
request an additional year. The Company has provided indemnification to the
Buyer on various pending issues with respect to the HealthCare business
including certain medicare reimbursement issues and the collectibility of loans
related to the businesses' physical therapy student loan program. The Company
does not expect that the outcome of these matters will have a material effect on
the Company's financial position or results of operation.

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited Pro Forma Condensed Consolidated Statement of
Earnings of the Company for the year ended December 26, 1997 is based on
historical financial statements of the Company and has been adjusted to reflect
the sale of the Company's HealthCare business, the acquisition of Michael Page
and other acquisitions made since the beginning of the year, as if such
acquisitions and disposition had occurred at the beginning of the year.

F-11
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

ACQUISITIONS AND DISPOSITION (CONTINUED)
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 26, 1997

<TABLE>
<CAPTION>
PRO FORMA
PROFORMA ACQUISITIONS AFTER
EFFECT OF ------------------------------------------- DISPOSITION
HISTORICAL HEALTHCARE MICHAEL OTHER PRO FORMA AND
INTERIM DISPOSITION(A) PAGE(E) ACQUISITIONS(E) ADJUSTMENTS ACQUISITIONS
---------- -------------- ----------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenues......................... $1,608,256 $ (189,589) $ 76,253 $ 25,200 $ (138)(f) $1,519,982
Cost of services................. 1,081,113 (113,050) 38,213 15,717 (138)(f) 1,021,855
---------- -------------- ----------- --------------- ------------- ------------
Gross Profit................. 527,143 (76,539) 38,040 9,483 -- 498,127
---------- -------------- ----------- --------------- ------------- ------------
Selling, general & admin. exp.... 363,152 (61,094) 25,073 6,764 536(g) 334,431
Licensee commissions............. 45,091 (597) -- -- (536)(g) 43,958
Amortization of intangibles...... 18,492 (1,812) -- -- 3,948(h) 20,628
Interest expense................. 24,269 (5,288)(b) (964) -- 13,455(i) 31,472
Gain on sale of HealthCare
Business....................... (5,300) 5,300(c) -- -- -- --
Merger expense................... -- -- 5,064 -- (5,064)(j) --
---------- -------------- ----------- --------------- ------------- ------------
445,704 (63,491) 29,173 6,764 12,339 430,489
---------- -------------- ----------- --------------- ------------- ------------
Earnings before taxes........ 81,439 (13,048) 8,867 2,719 (12,339) 67,638
Income taxes..................... 38,928 (8,793)(d) 4,593 (3,473)(k) 31,255
---------- -------------- ----------- --------------- ------------- ------------
Net earnings................. $ 42,511 $ (4,255) $ 4,274 $ 2,719 $ (8,866) $ 36,383
---------- -------------- ----------- --------------- ------------- ------------
---------- -------------- ----------- --------------- ------------- ------------
Diluted earnings per share....... $ 1.05 $ 0.90
---------- ------------
---------- ------------
Diluted weighted average shares
outstanding.................... 40,407 40,407
---------- ------------
---------- ------------
</TABLE>

- ------------------------

NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS

(a) To eliminate the results of operations of the HealthCare business. A portion
of the eliminated selling, general and administrative costs reflect
corporate expenses that have been allocated to the HealthCare business or
that will be eliminated. These corporate expenses reflect management's best
estimate of the costs no longer expected to be incurred by Interim
subsequent to the disposition of the HealthCare business.

(b) To reduce interest expense due to the reduction of debt from cash flows
generated from the sale of the HealthCare business.

(d) To reflect the aggregate tax benefit of eliminating the HealthCare business,
taxes on the gain and reducing borrowings.

(e) Reflects the historical financial statements of the acquired companies.
Michael Page's financial statements have been adjusted for differences
between U.S. and U.K. Generally Accepted Accounting Principles. Michael
Page's statement of income has been translated into U.S. dollars using
average exchange rates for the period.

(f) To eliminate royalties as a result of the repurchase of Interim franchises.

(g) To eliminate licensee commissions as a result of the repurchase of several
Interim license operations.

(h) To reflect amortization of goodwill and other intangibles generated by the
acquisitions on a straight-line basis over a weighted average life of 40
years.

(i) To reflect the pro forma effect of interest on the additional borrowings
used to fund the acquisitions. Interest on the credit facilities is computed
at LIBOR plus 85 basis points.

(j) To eliminate one-time costs incurred by Michael Page related to it being
acquired by the Company.

F-12
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

ACQUISITIONS AND DISPOSITION (CONTINUED)
(k) To reflect the aggregate tax benefit of pro forma acquisition adjustments.

For the year ended December 27, 1996 revenues, net earnings and diluted
earnings per share would have been $1,201,548, $11,500 and $0.34, respectively,
had these acquisitions and the disposition of the HealthCare business occurred
at the beginning of the period.

INTANGIBLE ASSETS

A summary of intangible assets is as follows:

<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE LIFE AVERAGE LIFE
(IN YEARS) DEC. 26, 1997 (IN YEARS) DEC. 27, 1996
----------------- -------------- ----------------- --------------
<S> <C> <C> <C> <C>
Goodwill........................ 37 $ 516,058 29 $ 214,416
Less accumulated amortization... (40,402) (40,778)
-------------- --------------
Goodwill, net................... $ 475,656 $ 173,638
-------------- --------------
-------------- --------------

Tradenames...................... 40 $ 223,216 5 $ 394
Other intangibles............... 5 3,098 5 4,561
-- --
-------------- --------------
38 226,314 29 4,955
Less accumulated amortization... (6,842) (3,846)
-------------- --------------
Tradenames and other
intangibles, Net.............. $ 219,472 $ 1,109
-------------- --------------
-------------- --------------
</TABLE>

Amortization of intangible assets is as follows:

<TABLE>
<CAPTION>
DEC. 26, DEC. 27, DEC. 29,
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Goodwill..................................................... $ 14,193 $ 8,241 $ 6,021
Tradenames................................................... 3,877 1 --
Other intangibles............................................ 422 560 863
----------- ----------- -----------
$ 18,492 $ 8,802 $ 6,884
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

PROPERTY AND EQUIPMENT

A summary of property and equipment follows:

<TABLE>
<CAPTION>
LIFE DEC. 26, DEC. 27,
(IN YEARS) 1997 1996
----------- --------- ---------
<S> <C> <C> <C>
Land........................................................ -- $ 4,167 $ 4,167
Buildings................................................... 10 - 40 14,331 11,394
Equipment................................................... 3 - 8 82,871 60,453
Software.................................................... 3 - 5 15,060 14,270
Leasehold improvements and other............................ 3 - 5 7,653 2,419
--------- ---------
124,082 92,703
Less accumulated depreciation and amortization.............. (58,607) (42,908)
--------- ---------
$ 65,475 $ 49,795
--------- ---------
--------- ---------
</TABLE>

Depreciation and amortization of property and equipment for the years ended
December 26, 1997, December 27, 1996 and December 29, 1995 amounted to $16,382,
$10,109, and $7,672, respectively.

F-13
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

LONG-TERM DEBT

The Company's debt as of December 26, 1997 was comprised of the following:

<TABLE>
<S> <C>
U.S. dollar denominated term loan, due 1998 through 2003......... $ 176,700
Revolving loan facility, due 2003--
British pound sterling denominated borrowings.................. 209,488
U.S. dollar denominated borrowings............................. 10,000
Loan notes denominated in British Pound Sterling................. 16,836
---------
413,024
Less current portion of long term debt........................... (33,827)
---------
$ 379,197
---------
---------
</TABLE>

The Company has available $535,908 under a multi-currency syndicated credit
agreement entered into as of May 1, 1997 and amended as of June 2, 1997 ("Credit
Facility"). This agreement provides both a U.S. dollar denominated term loan and
a multi-currency revolving loan facility. Borrowings under this facility are
unsecured. Interest rates on amounts outstanding under the term loan and
revolving loan are based on LIBOR plus a variable margin. The facility contains
customary covenants, which include the maintenance of certain financial ratios
including minimum net worth, restrictions on the incurrence of lines and
additional indebtedness. The average interest rate for the year ending December
26, 1997 was 6.9%.

The Company also has sterling denominated loan notes outstanding payable to
certain former shareholders of Michael Page. Interest on these notes is based on
six month sterling LIBOR less 1%. The Company expects the majority of these
notes to be paid in 1998.

In addition, the Company has established short-term, unsecured, uncommitted
lines of credit with certain banks. These lines of credit are based on LIBOR and
are available to fund the Company's short-term capital requirements.

Under these agreements, the Company had approximately $120.0 million
available for future borrowings as of December 26, 1997.

The maturities of long term debt outstanding at December 26, 1997, are
summarized as follows: $33,827 in 1998, $23,787 in 1999, $33,981 in 2000,
$50,971 in 2001, $50,971 in 2002.

The Company had various credit facilities in place prior to 1997 with
variable interest rates. No debt was outstanding as of December 27, 1996
pursuant to these agreements.

F-14
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

INCOME TAXES

The provision for income taxes is comprised of the following:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996 DEC. 29, 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Current tax expense:
Federal.................................... $ 23,220 $ 17,062 $ 14,509
State and Local............................ 6,055 4,110 3,636
Foreign.................................... 15,307 238 --
-------------- -------------- --------------
44,582 21,410 18,145
-------------- -------------- --------------
Deferred tax (benefit) expense:
Federal.................................... (3,029) 538 (63)
State and Local............................ (721) 149 (11)
Foreign.................................... (1,904) -- --
-------------- -------------- --------------
(5,654) 687 (74)
-------------- -------------- --------------
Total Provision for Income Taxes............. $ 38,928 $ 22,097 $ 18,071
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

The following table reconciles the U.S. Federal income tax rate to the
Company's effective tax rate:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996 DEC. 29, 1995
----------------- ----------------- -----------------
<S> <C> <C> <C>
Statutory Rate............................... 35.0% 35.0% 35.0%
Increase (decrease) in rate resulting from:
State and local income taxes, net of
federal benefit.......................... 4.3 6.2 5.6
Nondeductible amortization of
intangibles.............................. 5.9 3.6 3.9
Sale of HealthCare business................ 3.2 -- --
Merger expense............................. -- 4.7 --
Other, net................................. (0.6) (0.5) (1.3)
--- --- ---
Effective Tax Rate........................... 47.8% 49.0% 43.2%
--- --- ---
--- --- ---
</TABLE>

Significant components of the Company's deferred tax assets and liabilities
are as follows:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996
--------------- ---------------
<S> <C> <C>
Current deferred tax assets:
Employee benefits and self-insurance....................... $ 9,529 $ 2,935
Receivables allowances..................................... 1,354 1,114
Other...................................................... 26 128
------- -------
10,909 4,177
------- -------
Noncurrent deferred tax assets (liabilities):
Fixed assets............................................... (1,123) (1,688)
Intangible assets.......................................... (2,947) (1,075)
Other...................................................... 16 (35)
------- -------
(4,054) (2,798)
------- -------
Net deferred tax assets...................................... $ 6,855 $ 1,379
------- -------
------- -------
</TABLE>

F-15
<PAGE>
EMPLOYEE BENEFIT PLANS

The Company has various savings plans covering substantially all eligible
employees. Company contributions to the plans are based on employee
contributions, the level of the Company match and the attainment of certain
financial objectives. During 1997, plans maintained by three of the Company's
business units were merged into one. Contributions by the Company under these
plans amounted to $2,402, $393 and $666 for the years ended December 26, 1997,
December 27, 1996 and December 29, 1995, respectively.

During 1995, the Company started a deferred compensation plan for certain
employees who are not eligible to participate in the Company's 401(k) savings
plan. This plan was extended to a larger group in 1997. The plan allows eligible
employees to defer receipt of a portion of their compensation. The Company
matches and accrues certain amounts deferred pursuant to this plan based upon
the same criteria as the 401(k) plan. The deferred compensation, along with the
Company matching amounts and accumulated investment earnings, is accrued. Such
accrual amounted to $5,507, $1,821 and $710 at December 26, 1997, December 27,
1996 and December 29, 1995, respectively.

Effective July 1997, the Company adopted a new Employee Stock Purchase Plan
(ESPP) to provide substantially all employees who have been employed for at
least 12 months an opportunity to purchase shares of its common stock at a
discount of 15%. The aggregate amount an employee may purchase is limited to a
maximum of 15% of an employee's compensation up to $25,000 of stock. There were
9,294 shares issued in 1997 under this plan. A total of 590,706 shares are
available as of December 26, 1997 for purchase under the plan which expires on
July 1, 2002.

STOCK-BASED COMPENSATION PLANS

The Company has three primary option stock plans, the 1997 Long-Term
Executive Compensation and Outside Directors Stock Option Plan, the 1997 Stock
Option Plan for employees of Michael Page Group PLC and the 1994 Stock Option
Plan for Franchisees, Licensees and Agents. The 1997 stock option plan for
employees of Michael Page was adopted solely to grant options to employees of
Michael Page to induce them to continue employment after the Michael Page
acquisition. Under the other two plans, options may be granted to outside
directors, selected employees of the Company and its subsidiaries, franchisees,
licensees and agents to purchase the Company's Common Stock for periods not to
exceed ten years at a price that is not less than 100 percent of fair market
value on the date of grant. Options granted under all plans are exercisable
cumulatively 20% to 100% each year beginning one-year after the initial date of
grant. At December 26, 1997 and December 27, 1996, the Company had 1,964,723 and
1,085,606 shares, respectively, reserved for future grants under these plans. In
addition, the Company's Outside Directors Compensation Plan provides for the
annual retainer to be paid in the form of the Company's Common Stock. At
December 26, 1997 and December 27, 1996, 5,027 and 7,162 shares, respectively,
were reserved for future grant under this Plan.

As part of the Company's bonus plan, the Board of Directors has authorized
50,000 shares of Common Stock to be used for payment of a portion of the bonus
payable to certain employees in the form of restricted shares of the Company's
Common Stock. These shares vest ratably over a three-year period. At December
26, 1997 and December 27, 1996, the Company had 21,858 and 3,306 shares,
respectively, reserved for future grant under this plan.

F-16
<PAGE>
Changes under these plans for 1997, 1996 and 1995 were as follows:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996 DEC. 29, 1995
---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- ----------- --------- ----------- --------- -----------
Outstanding at beginning of
year......................... 2,642,554 $ 13.24 2,203,422 $ 10.60 1,614,210 $ 9.28
Granted........................ 1,678,910 18.53 840,326 19.01 826,170 12.86
Exercised...................... (866,241) 11.09 (281,692) 9.49 (94,806) 7.49
Forfeited...................... (353,619) 16.85 (119,502) 14.25 (142,152) 10.89
--------- --------- ---------
Outstanding at end of year..... 3,101,604 $ 16.28 2,642,554 $ 13.24 2,203,422 $ 10.60
--------- --------- ---------
--------- --------- ---------
Options exercisable at
year-end..................... 908,495 $ 13.01 927,968 $ 9.83 650,046 $ 7.78
--------- --------- ---------
--------- --------- ---------
</TABLE>

The following table summarizes information about fixed stock options
outstanding at December 26, 1997:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------ -------------------------
<S> <C> <C> <C> <C> <C>
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
NUMBER REMAINING AVERAGE NUMBER AVERAGE
OUTSTANDING CONTRACTUAL EXERCISE EXERCISABLE EXERCISE
RANGE OF EXERCISE PRICES AT 12/26/97 LIFE PRICE AT 12/26/97 PRICE
- ------------------------- ------------ --------------- ----------- ------------ -----------
$0-$9.99................. 32,000 4.02 $ 6.74 32,000 $ 6.74
$10.00-$14.99............ 952,534 6.64 11.45 639,862 11.21
$15.00-$19.99............ 2,021,762 8.48 18.44 201,753 18.21
$20.00-$24.00............ 95,308 8.75 22.00 34,880 21.89
------------ ----- ----------- ------------ -----------
3,101,604.. 7.88 $ 16.28 908,495 $ 13.01
------------ ----- ----------- ------------ -----------
------------ ----- ----------- ------------ -----------
</TABLE>

The weighted average per share fair values of options granted under the
Company's stock option plans during 1997, 1996 and 1995 were $3.90, $4.03 and
$2.76, respectively. Had the fair value of the grants under these plans been
recognized as compensation expense over the vesting period of the awards,
compensation cost would have been increased by $2,896 ($2,039 after tax, $0.05
per share), $2,136 ($1,524 after tax, $0.05 per share) and $890 ($632 after tax,
$0.02 per share) in 1997, 1996 and 1995, respectively.

The fair value of options at grant date was estimated using the
Black-Scholes multiple option model where each vesting increment is treated as a
separate option with its own expected life and own fair value. The following
weighted average assumptions were used:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996 DEC. 29, 1995
----------------- ----------------- -----------------
<S> <C> <C> <C>
Expected life................................ 2 2 2
Interest rate................................ 5.99% 5.94% 5.98%
Volatility................................... 29.79% 30.30% 31.23%
Dividend Yield............................... -- -- --
</TABLE>

SHAREHOLDER RIGHTS PLAN

On February 17, 1994, the Company's Board of Directors adopted a shareholder
rights plan to protect shareholders in the event of an unsolicited attempt to
acquire the Company which is not believed by the Board of Directors to be in the
best interest of shareholders. Under the plan, a dividend of one

F-17
<PAGE>
right (a "Right") per share was declared and paid on each share of the Company's
Common Stock outstanding on April 1, 1994. As to shares issued after such date,
rights will automatically attach to them after their issuance.

Under the plan, registered holders of each Right may purchase from the
Company one one-hundredth of a share of a new class of the Company's Preferred
Stock, $0.01 par value per share, at a price of $150.00, subject to adjustment,
when the Rights become exercisable. The Rights become exercisable when a person
or group of persons acquires 15% or more of the outstanding shares of the
Company's Common Stock without the prior written approval of the Company's Board
of Directors (an "Unapproved Stock Acquisition"), and after ten business days
following the commencement of a tender offer that would result in an Unapproved
Stock Acquisition. If a person or group of persons makes an Unapproved Stock
Acquisition, the registered holder of each Right has the right to purchase, for
the exercise price of the Right, a number of shares of the Company's Common
Stock having a market value equal to twice the exercise price of the Right.
Following an Unapproved Stock Acquisition, if the Company is involved in a
merger, or 50% or more of the Company's assets or earning power are sold, the
registered holder of each Right has the right to purchase, for the exercise
price of the Right, a number of shares of the common stock of the acquiring
company having a market value equal to twice the exercise price of the Right.

After an Unapproved Stock Acquisition, but before any person or group of
persons acquires 50% or more of the outstanding shares of the Company's Common
Stock, the Board of Directors may exchange all or part of the then outstanding
and exercisable Rights for Common Stock at an exchange ratio of one share of
Common Stock per Right. Upon any such exchange, the right of any holder to
exercise a Right terminates.

The Company may redeem the Rights at a price of $0.01 per Right at any time
prior to an Unapproved Stock Acquisition (and after such time in certain
circumstances). The Rights expire on April 1, 2004, unless extended by the Board
of Directors. Until a Right is exercised, the holder thereof, as such, has no
rights as a stockholder of the Company, including the right to vote or to
receive dividends. The issuance of the Rights alone has no dilutive effect and
does not affect reported earnings per share.

FINANCIAL INSTRUMENTS AND FAIR VALUES

The Company had entered into variable to fixed interest rate swap agreements
in the notional amount of $100,000 as of December 26, 1997. These agreements
have expiration dates between 2000 and 2002. Under these agreements, the Company
received an average variable rate of 5.8% and paid an average fixed rate of 6.2%
during the twelve months ended December 26, 1997. The Company also has variable
to variable interest rate swap agreements outstanding at December 26, 1997 with
notional amounts of $225,693, which effectively convert interest from a LIBOR
basis to a broader index and cap the Company's exposure to upward movement in
rates at 8.5%. These agreements expire in 2002. Under these agreements, the
Company received an average variable rate of 6.3% and paid an average variable
rate of 5.4% during the twelve months ended December 26, 1997.

Exposure to market risk on interest rate and foreign currency financial
instruments results from fluctuations in interest and currency rates,
respectively, during the periods in which the contracts are outstanding. The
counterparties to the Company's interest rate swap agreements and currency
exchange contracts consist of a diversified group of major financial
institutions, each of which is rated investment grade A or better. The Company
is exposed to credit risk to the extent of potential nonperformance by
counterparties on financial instruments. Any potential credit exposure does not
exceed the fair value as stated below; the Company believes the risk of
incurring losses due to credit risk is remote.

The cost to terminate the outstanding interest rate swaps as of December 26,
1997 was $5,054. Book value at December 26, 1997 was a $287 receivable. The fair
values of all other financial instruments, including debt, approximate their
book values.

F-18
<PAGE>
COMMITMENTS AND CONTINGENCIES

Substantially all of the Company's operations are conducted in leased
premises. Total lease expense for the years ended December 26, 1997, December
27, 1996 and December 29, 1995 was $19,085, $11,543 and $7,187, respectively.
Future minimum lease payments under non-cancelable leases as of December 26,
1997 are $15,527, $14,593, $12,140, $9,594, $5,747 in 1998, 1999, 2000, 2001 and
2002, respectively.

Additionally, the Company had outstanding irrevocable letters of credit of
approximately $37.8 million (same as fair value). These letters of credit, which
expire in 1998, collateralize the Company's obligation under certain workers'
compensation insurance programs.

The Company in the ordinary course of its business is threatened with or
named as a defendant in various lawsuits. It is not possible to determine the
ultimate disposition of these matters; however, management is of the opinion
that the final resolution of any threatened or pending litigation is not likely
to have a material adverse effect on the financial position or results of
operations of the Company.

GEOGRAPHIC INFORMATION

The Company operates within one industry segment, providing employment
services in the United States, Puerto Rico, Canada, The Netherlands, United
Kingdom, France, Germany, Italy, Spain, Hong Kong, Singapore, Australia and New
Zealand. Prior to April 18, 1997, when the Company acquired Michael Page, the
Company's global interest was almost entirely in North America. For purposes of
this disclosure the Company has grouped its operations into these regions: North
America, Europe, and Asia Pacific.

The table below provides information pertaining to the Company's operation
by geographic area:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996 DEC. 29, 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Revenues:
North America.............................. $ 1,357,093 $ 1,144,558 $ 864,247
Europe..................................... 214,930 2,593 --
Asia Pacific............................... 36,233 -- --
-------------- -------------- --------------
$ 1,608,256 $ 1,147,151 $ 864,247
-------------- -------------- --------------
-------------- -------------- --------------
Operating Profit:
North America.............................. $ 60,912 $ 58,973 $ 42,794
Europe..................................... 34,963 435 --
Asia Pacific............................... 4,533 -- --
-------------- -------------- --------------
100,408 59,408 42,794
Interest Expense............................. 24,269 5,696 990
Gain on sale of HealthCare business/merger
expenses................................... (5,300) 8,600 --
-------------- -------------- --------------
Earnings before income taxes................. $ 81,439 $ 45,112 $ 41,804
-------------- -------------- --------------
-------------- -------------- --------------
Identifiable Assets:
North America.............................. $ 465,367 $ 512,490 $ 424,489
Europe..................................... 548,268 -- --
Asia Pacific............................... 78,099 -- --
-------------- -------------- --------------
$ 1,091,734 $ 512,490 $ 424,489
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

F-19
<PAGE>
QUARTERLY FINANCIAL DATA (UNAUDITED-AMOUNT IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)

The following is a tabulation of the quarterly results of operations for the
years ended December 26, 1997 and December 27, 1996.

<TABLE>
<CAPTION>
1997 QUARTER ENDED
------------------------------------------------------------------
<S> <C> <C> <C> <C>
DEC. 26, 1997 SEPT. 26, 1997(A) JUNE 27, 1997 MARCH 28, 1997
-------------- ----------------- -------------- ---------------
Revenues................. $ 412,868 $ 455,770 $ 422,833 $ 316,785
Gross profit............. 134,331 153,414 141,958 97,440
Earnings before taxes.... 21,546 26,844 18,375 14,674
Income taxes............. 9,529 14,797 8,453 6,149
Net earnings (loss)...... 12,017 12,047 9,922 8,525
Basic earnings (loss) per
share.................. 0.30 0.31 0.25 0.22
Diluted earnings (loss)
per share.............. 0.29 0.30 0.25 0.21
Share price:
High..................... 31.000 25.625 21.438 21.563
Low...................... 23.625 21.750 17.563 17.125
</TABLE>

<TABLE>
<CAPTION>
1996 QUARTER ENDED
------------------------------------------------------------------
<S> <C> <C> <C> <C>
DEC. 27, 1996 SEPT. 27, 1996 JUNE 28, 1996(B) MARCH 29, 1996
-------------- -------------- ----------------- ---------------
Revenues................. $ 306,527 $ 294,711 $ 281,188 $ 264,725
Gross profit............. 94,521 91,160 86,684 78,997
Earnings before taxes.... 17,237 13,970 4,069 9,836
Income taxes............. 7,192 6,143 4,415 4,347
Net earnings (loss)...... 10,045 7,827 (346) 5,489
Basic earnings (loss) per
share.................. 0.27 0.25 (0.01) 0.18
Diluted earnings (loss)
per share.............. 0.26 0.25 (0.01) 0.17
Share price:
High..................... 22.813 22.000 25.125 20.375
Low...................... 17.000 18.250 17.375 17.125
</TABLE>

- ------------------------

(a) Includes pretax gain on sale of HealthCare business of $5,300 and taxes of
$5,272.

(b) Includes $8,600 pretax of Brandon merger expenses.

F-20
<PAGE>
UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the Underwriters named below, and each of
the Underwriters, for whom Goldman, Sachs & Co., NationsBanc Montgomery
Securities LLC, Robert W. Baird & Co. Incorporated, BT Alex. Brown Incorporated
and Chase Securities Inc. are acting as representatives, has severally agreed to
purchase from the Company, the principal amount of the Notes set forth opposite
its name below:

<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
UNDERWRITER NOTES
- ---------------------------------------------------------------------- --------------------
<S> <C>
Goldman, Sachs & Co...................................................
NationsBanc Montgomery Securities LLC.................................
Robert W. Baird & Co. Incorporated....................................
BT Alex. Brown Incorporated...........................................
Chase Securities, Inc.................................................

--------------------
Total........................................................... $ 150,000,000
--------------------
--------------------
</TABLE>

Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Notes, if any are
taken.

The Underwriters propose to offer the Notes in part directly to the public
at the initial public offering price set forth on the cover page of this
Prospectus and in part to certain securities dealers at such price less a
concession of % of the principal amount of the Notes. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of % of the
principal amount of the Notes to certain brokers and dealers. After the Notes
are released for sale to the public, the offering price and other selling terms
may from time to time be varied by the representatives.

The Company has granted the Underwriters an option exercisable for 30 days
after the date of this Prospectus to purchase up to an aggregate of $22,500,000
principal amount of Notes solely to cover over-allotments, if any. If the
Underwriters exercise their over-allotment option, the Underwriters have
severally agreed, subject to certain conditions, to purchase approximately the
same percentage thereof that the principal amount of the Notes to be purchased
by each of them, as shown in the foregoing table, bears to the $150,000,000
principal amount of Notes offered.

The consummation of the Notes Offering and the Common Stock Offerings are
not conditioned upon each other.

The Company has agreed that, during the period beginning from the date of
this Prospectus and continuing to and including the date 90 days after the date
of the Prospectus, it will not offer, sell, contract to sell or otherwise
dispose of any securities of the Company (other than pursuant to employee stock
option plans existing, or on the conversion or exchange of convertible or
exchangeable securities outstanding, on the date of this Prospectus) which are
substantially similar to the shares of the Common Stock or which are convertible
or exchangeable into securities which are substantially similar to the shares of
the Common Stock without the prior written consent of the Underwriters, except
for the shares of Common Stock offered in connection with the concurrent U.S.
and international Common Stock offerings and the shares of Common Stock issuable
upon conversion of the Notes offered hereby.

U-1
<PAGE>
In connection with the Offerings and the Notes Offering, the Underwriters
may purchase and sell the Common Stock and the Notes in the open market. These
transactions may include over-allotment and stabilizing transactions and
purchases to cover syndicate short positions created by the Underwriters in
connection with the Offerings and the Notes Offering. Stabilizing transactions
consist of certain bids or purchases for the purpose of preventing or retarding
a decline in the market price of the Common Stock or the Notes; and syndicate
short positions involve the sale by the Underwriters of a greater number of
shares of Common Stock or Notes than they are required to purchase from the
Company in the Offerings or the Notes Offering. The Underwriters also may impose
a penalty bid, whereby selling concessions allowed to syndicate members or other
broker-dealers in respect of the Common Stock or Notes sold in the Offerings and
the Notes Offering for their account may be reclaimed by the syndicate if such
Common Stock or Notes are repurchased by the syndicate in stabilizing or
covering transactions. These activities may stabilize, maintain or otherwise
affect the market price of the Common Stock or the Notes, which may be higher
than the price that might otherwise prevail in the open market; and these
activities, if commenced, may be discontinued at any time. These transactions
may be effected on the New York Stock Exchange, in the over-the-counter market
or otherwise.

Each Underwriter has also agreed that (a) it has not offered or sold and
prior to the date six months after the date of issue of the Notes will not offer
or sell any of the Notes to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995; (b) it has complied, and will
comply with, all applicable provisions of the Financial Services Act of 1988 of
Great Britain with respect to anything done by it in relation to the Notes in,
from or otherwise involving the United Kingdom, and (c) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issuance of the Notes to a person who is
of a kind described in Article 11 (3) of the Financial Services Act of 1986
(Investment Advertisements) (Exemptions) Order 1995 of Great Britain or is a
person to whom the document may otherwise lawfully be issued or passed on.

The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that they intend to make a
market in the Notes but are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for the Notes.

An affiliate of NationsBanc Montgomery Securities LLC and an affiliate of
Chase Securities, Inc. provide certain commercial banking services to the
Company.

The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.

U-2
<PAGE>
[INSIDE BACK COVER: WORLD MAP INDICATING OFFICE LOCATIONS FOR COMMERCIAL AND
PROFESSIONAL SERVICES]
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 10
Use of Proceeds....................... 14
Concurrent Common Stock Offering...... 14
Price Range of Common Stock........... 15
Dividend Policy....................... 15
Capitalization........................ 16
Selected Consolidated Financial and
Operating Data...................... 17
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 19
Business.............................. 25
Management............................ 36
Description of Notes.................. 38
Certain Federal Tax Considerations.... 49
Validity of the Securities............ 52
Experts............................... 52
Available Information................. 52
Incorporation of Certain Documents by
Reference........................... 52
Index to Consolidated Financial
Statements.......................... F-1
Underwriting.......................... U-1
</TABLE>

$150,000,000

[LOGO]

% CONVERTIBLE SUBORDINATED
NOTES DUE 2005

---------------------

PROSPECTUS

---------------------

GOLDMAN, SACHS & CO.
NATIONSBANC MONTGOMERY
SECURITIES LLC
ROBERT W. BAIRD & CO.
INCORPORATED
BT ALEX. BROWN
CHASE SECURITIES INC.

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses to be incurred by the
Company in connection with the issuance and distribution of the Common Stock and
Notes being registered.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............ $50,887.50
NASD filing fee................................................ *
Accounting fees and expenses................................... *
Legal Fees and expenses........................................ *
Printing and Engraving expenses................................ *
Blue Sky fees and expenses..................................... *
Trustee's Fees and Expenses.................................... *
Miscellaneous.................................................. *
----------
Total...................................................... $
----------
----------
</TABLE>

- ------------------------

* To be completed by amendment.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Amended and Restated Certificate of Incorporation and By-laws
provide that the Company shall indemnify its directors and officers and, upon
certain conditions and in certain circumstances, may advance expenses, to the
fullest extent permitted by the General Corporation Law of the State of Delaware
(the "GCL"), except that they do not permit indemnification or eliminate
liability for: (i) any breach of the duty of loyalty to the Company or its
shareholders; (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) an act or omission
expressly described in Section 174 of the GCL; or (iv) any transaction from
which the director derived an improper personal benefit. Generally, Section 145
of the GCL authorizes Delaware corporations, under certain circumstances, to
indemnify their officers and directors against all expenses and liabilities
(including attorneys' fees) incurred by them as a result of any suit brought
against them in their capacity as a director or an officer, if they acted in
good faith and in a manner they reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, if they had no reasonable cause to believe their conduct was
unlawful. A director or officer may also be indemnified against expenses
incurred in connection with a suit by or in the right of the corporation if such
director or officer acted in good faith and in a manner reasonably believed to
be in or not opposed to the best interests of the corporation, except that no
indemnification may be made without court approval if such person was adjudged
liable to the corporation. The foregoing provisions may reduce the likelihood of
derivative litigation against directors, officers and employees of the Company
and may discourage or deter shareholders or management from bringing a lawsuit
against directors and officers for breaches of their fiduciary duties, even
though such an action, if successful, might otherwise have benefited the Company
and its shareholders.

Additionally, the Underwriting Agreement provides that the Underwriter shall
indemnify each director of the Company, each officer of the Company who signed
this Registration Statement, and each person who controls the Company for
certain liabilities, including certain liabilities under the Securities Act of
1933, as amended.

II-1
<PAGE>
ITEM 16. EXHIBITS

(A) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT NAME
- ----------- ----------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement (1).

2.1 Agreement and Plan of Merger, filed as an Exhibit to the Company's Proxy
Statement/ Prospectus, dated April 24, 1996 and is incorporated herein by
reference.

4.1 Form of Stock Certificate, filed as Exhibit 4.3 to the registrant's Form 10-K for
the fiscal year ended December 27, 1996, is incorporated herein by reference.

4.2 Rights Agreement dated as of March 17, 1994 between the registrant and Boatmen's
Trust Company, filed as Exhibit 1.1 to the registrant's Form 8-A filed April 11,
1994, is incorporated herein by reference.

4.3 Certificate of Designation, Preferences and Rights filed with the Secretary of
State of the State of Delaware, filed as Exhibit 2.1 to the registrant's Form 8- A
filed April 11, 1994, is incorporated herein by reference.

4.4 Amendment No. 1 to Rights Agreement dated June 26, 1996 between the registrant,
Boatmen's Trust Company and ChaseMellon Shareholder Services L.L.C., filed as
Exhibit 4.1(A) to the registrant's Form 10-Q for the quarter ended September 27,
1996, is incorporated herein by reference.

4.5 Amendment No. 2 to Rights Agreement dated February 25, 1997 between the registrant
and ChaseMellon Shareholder Services L.L.C., filed as Exhibit 4.1(B) to the
registrant's Form 10-Q for the quarter ended March 28, 1997, is incorporated
herein by reference.

4.6 Articles Fourth, Fifth, Seventh, Eighth and Tenth of the Restated Certificate of
Incorporation of the registrant, as amended September 12, 1996, filed as part of
Exhibit 4.4 to the registrant's Form 10-K for the fiscal year ended December 27,
1996, are incorporated herein by reference.

4.7 Sections Four through Twelve and Thirty-five through Forty-one of the Bylaws of
the registrant, as amended, filed as part of Exhibit 4.2 to registrant's Form S- 3
filed September 16, 1996, are incorporated herein by reference.

4.8 Certificate of Increase of Shares Designated as Participating Preferred Stock,
filed as Exhibit 2.2 to the Corporation's Form 8-A/A2, dated November 3, 1997, is
incorporated herein by reference.

4.9 Form of Indenture; Form of Debenture (1).

5.1 Opinion of Baker & McKenzie (1).

12.1 Statement regarding computation of ratios (1).

23.1 Consent of Baker & McKenzie (included in Exhibit 5.1) (1).

23.2 Consent of Deloitte & Touche LLP (2).

24.1 Power of Attorney (included on Signature Page) (2).

25.1 Statement of eligibility of trustee on Form T-1 (1).

27.1 Financial Data Schedule (1).
</TABLE>

- ------------------------

(1) To be filed by amendment.

(2) Filed herewith.

II-2
<PAGE>
ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) For purposes of determining any liability under the Securities Act
of 1933, each filing of the Company's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offering therein,
and the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.

(2) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report, to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3 of Regulation
S-X is not set forth in the prospectus, to deliver, or cause to be delivered
to each person to whom the prospectus is sent or given, the latest quarterly
report that is specifically incorporated by reference in the prospectus to
provide such interim financial information.

(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

(4) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(5) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.

(6) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of section 310 of the Trust Indenture Act ("Act") in
accordance with the rules and regulations prescribed by the Commission under
section 305(b)2 of the Act.

II-3
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Fort Lauderdale, state of Florida, on the 21st day of
April, 1998.

INTERIM SERVICES INC.

BY: /S/ RAYMOND MARCY
-----------------------------------------
Raymond Marcy
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER

POWER OF ATTORNEY

Each person whose signature appears below appoints Raymond Marcy and John B.
Smith, and each of them, any of whom may act without the joiner of the other, as
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign this Registration Statement and any and all
amendments (including post-effective amendments) to this Registration Statement
or a Registration Statement for the same offering that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and
to file the same, with all exhibits thereto and all other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.

II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
/s/ STEVEN S. ELBAUM Director
- ------------------------------ April 20, 1998
Steven S. Elbaum

/s/ WILLIAM F. EVANS Director
- ------------------------------ April 20, 1998
William F. Evans

/s/ JEROME B. GROSSMAN Director
- ------------------------------ April 20, 1998
Jerome B. Grossman

/s/ CINDA A. HALLMAN Director
- ------------------------------ April 20, 1998
Cinda A. Hallman

/s/ J. IAN MORRISON Director
- ------------------------------ April 17, 1998
J. Ian Morrison

/s/ A. MICHAEL VICTORY Director
- ------------------------------ April 20, 1998
A. Michael Victory

Chairman, President and
/s/ RAYMOND MARCY Chief Executive Officer
- ------------------------------ (principal executive April 21, 1998
Raymond Marcy officer)

Executive Vice President
/s/ ROY G. KRAUSE and Chief Financial
- ------------------------------ Officer (principal April 21, 1998
Roy G. Krause financial officer)

/s/ MARK W. SMITH Vice President--Finance
- ------------------------------ (principal accounting April 21, 1998
Mark W. Smith officer)

II-5

<PAGE>
EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement relating to
$150,000,000 Convertible Subordinated Notes of Interim Services Inc. on Form S-3
of our report dated February 5, 1998, included and incorporated by reference in
the Annual Report on Form 10-K of Interim Services Inc. for the year ended
December 26, 1997, and to the use of our report dated February 5, 1998,
appearing in the Prospectus, which is a part of this Registration Statement. We
also consent to the references to us under the headings "Selected Consolidated
Financial and Operating Data" and "Experts" in such Prospectus.

/s/ DELOITTE & TOUCHE LLP

Fort Lauderdale, Florida
April 22, 1998